Franklin Templeton Fixed Tenure Fund-Series VI (FTFTF-Series VI) is a close-ended income fund with 5-year investment tenure. It proposes to generate stable returns and capital appreciation. FTFTF-Series VI works on the proposition of combining the stability of debt with the power of equities.
This in turn also offers investors the benefits of diversification across asset classes. Despite the fund's close-ended nature, investors will have the option to redeem their investments every 6 months over a pre-determined 7-day period; however an exit load will have to be borne on the same.
The 10-year 7.59% GOI (Government of India) paper is presently yielding 8.36% (July 18, 2006), the highest we have seen over the last few years. In fact, only some days ago, it had peaked to nearly 8.50%. Combine that with the attractive level of the stock markets post-correction.
Investors who invest in both these markets today and are willing to wait patiently over the long term (5 years in this case) are likely to get superior returns at relatively lower risk. To that end, FTFTF-Series VI presents an attractive investment proposition.
The fund will appeal to investors with a moderate risk appetite who typically invest in fixed income instruments like fixed deposits, but are willing to take on some risk for clocking higher returns.