The Supreme Court on Tuesday ordered that Rs 9,122 crore be disbursed within three weeks to the unitholders of Franklin Templeton's six mutual fund schemes which are proposed to be wound up.
Franklin Templeton Mutual Fund on Thursday said its six shut schemes have received Rs 11,907 crore from maturities, pre-payments and coupon payments since closing down in April. Franklin Templeton MF had shut six debt mutual fund schemes on April 23, citing redemption pressures and lack of liquidity in the bond market. The schemes -- Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund, and Franklin India Income Opportunities Fund -- together had an estimated Rs 25,000 crore as assets under management.
With a 'yes' vote, there is a more foreseeable outcome, while a 'no' could result in greater uncertainty, for which retail investors may not have the appetite.
Industry body Association of Mutual Funds in India on Friday assured investors that a majority of fixed income mutual funds assets are invested in superior credit quality securities and such schemes have appropriate liquidity to ensure normal operations. The statement by the industry body came after Franklin Templeton Mutual Fund voluntarily decided to wind up its six debt schemes citing redemption pressure and lack of liquidity in bond markets due to the coronavirus pandemic.
'It takes time and the experience of a few market cycles to develop awareness about one's true risk appetite.'
Taking credit risks in shorter-tenure funds can help jack up returns considerably, boosting sales.
After the Franklin Templeton episode, investor confidence has been shaken. Known brands have become more relevant to investors, as long as this psychological impact lasts.
'MFs acted as reckless lenders and not as prudent investors.' 'Clearly, how debt funds are being run is a systemic issue,' warns Debashis Basu.
'We know that returning money to unitholders at the earliest is the first and most important step towards resurrecting our brand and regaining investor trust.'
As the stock markets scale new peaks almost every day in a pre-poll rally, a vast majority of Indian investors expect a further rise in equities in the current year, says a survey.
'Investors looking at the next 6-12 months can be certain that the Fed will maintain its easing cycle, and we expect the overall environment to be conducive for fixed income investments for portfolio diversification.'
In a statement, the central bank said heightened volatility in capital markets in reaction to Covid-19 has imposed liquidity strains on mutual funds (MFs), which have intensified in the wake of redemption pressures related to closure of some debt MFs and potential contagious effects therefrom.
Over the past 25 years the MF industry has come a long way. Geographic reach has increased, many more customers have been added, more channels have been opened up and the product basket is full.
When evaluating bonds, returns shouldn't be the sole factor. Pay close attention to the bond's credit rating. It should ideally be AA or higher.
In 2021, there is the risk of interest rates spiking. Investors should tackle duration risk with a longer investment horizon, suggests Sanjay Kumar Singh.
While an impending rate cut is a good reason to enter debt funds, another is the high valuations in equity markets.
Insurance firms have designed amazing retirment plans to lure more customers.
The SIP route suits the salaried class, by matching their income flows with investment frequency.
Following the money and freezing anything unaccounted is the only way to set an example for others, suggests Debashis Basu.
Instead of getting swayed by market gyrations, investors must stay invested for the long term, advises Sarbajeet K Sen.
There are some advantages of a falling rupee.
Omkeshwar Singh, Head, Rank MF, a mutual fund investment platform, will answer your queries.
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