Tag: Franklin Templeton

SBI Funds completes liquidation of assets in Franklin Templeton MF’s six debt schemes

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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SBI Funds Management Ltd on Tuesday said it has completed the liquidation of assets in the six shuttered debt schemes of Franklin Templeton Mutual Fund and distributed Rs 27,508 crore to the latter’s unitholders.

Franklin Templeton in April 2020 announced shutting down of the six debt mutual fund schemes, citing redemption pressures and lack of liquidity in the bond market.

With this, SBI Funds Management has liquidated 217 securities and disbursed around Rs 27,508 crore which constitutes 109 per cent of the value of the securities as on date of winding up — April 23, 2020, the company said in a statement.

It further said that the liquidation activity was done without creating any market dislocation in order to get the best liquidation value and safeguard the interest of unitholders of Franklin Templeton Mutual Fund (FTMF).

The company was directed by the Supreme Court in 2021 to undertake the exercise of disbursement and liquidation of assets of the six wound-up debt schemes of FTMF.

”We are happy to share that the last tranche of the securities, forming part of FTMF wound up debt schemes, has been liquidated as part of the above mandate given to us,” SBI Funds said.

The six schemes had collective assets under management of Rs 25,215 crore, when the decision to close the funds was announced.

The schemes were 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.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Franklin Templeton MF says returned over Rs 27,000 crore to investors of 6 shuttered schemes

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Franklin Templeton Mutual Fund (MF) on Tuesday said it has returned over Rs 27,000 crore to unit holders of six shuttered debt schemes till date.

The amount translates to around 107.51 percent of the aggregate reported assets under management value across the six funds as of April 23, 2020, when the fund house announced shutting the six debt mutual fund schemes, citing redemption pressures and lack of liquidity in the bond market.

Only short term income plan has some miniscule assets that have to be liquidated, according to a Franklin Templeton spokesperson.

The six schemes had collective assets under management of Rs 25,215 crore, when the decision to close the funds was announced, it said in a statement.

The schemes were 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 — In a separate statement, Franklin Templeton announced senior management appointments in its India AMC fixed income team and the alternatives business.

Rahul Goswami has joined as the Chief Investment Officer (CIO) and Managing Director (MD) of Franklin Templeton India’s fixed income team. Santosh Kamath, current Chief Investment Officer (CIO) of fixed income funds, will assume a new role as the President and CIO of Franklin Templeton Alternative Investments India Pvt Ltd. These appointments are effective from August 1.

The India Alternatives business will initially focus on alternative credit, covering listed and unlisted corporate bonds and structured credit.

“In his new role as President and CIO of Franklin Templeton’s Alternatives business in India. Santosh’s focus will be on developing and launching credit alternatives products targeted at the sophisticated investor… Rahul will work closely with me in formulating the India fixed income strategy,” Avinash Satwalekar, President at Franklin Templeton-India, said.

Goswami will oversee the fixed income functions of the locally managed and distributed debt schemes of Franklin Templeton Mutual Fund. Earlier, he was the CIO of fixed income at ICICI Prudential Asset Management.

With regard to the shuttered schemes, the Franklin Templeton spokesperson said that five out of six schemes have liquidated all performing assets and extinguished all units.

“As of July 31, 2023, these funds have distributed Rs 27,109.34 crore (approximately USD 3.7 billion) to unit holders, amounting to 107.51 percent of the aggregate reported AUM value across the six funds as of April 23, 2020,” he said.

The total disbursed amount so far ranges between 100.3 percent and 113.04 percent of the respective assets under management of the six schemes.

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Rahul Goswami joins Franklin Templeton as head of fixed income, Santosh Kamath to lead alternatives business

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Franklin Templeton, an asset management company, has reshuffled its senior management roles in India. Rahul Goswami has joined the company as the Chief Investment Officer (CIO) and Managing Director (MD) of India AMC Fixed Income, while Santosh Kamath will now lead the India Alternatives business as the President and CIO.

The company said that these changes, effective from August 1, 2023, will help it offer more diverse solutions to its clients in India and strengthen its position as a leading asset manager in the country.

Avinash Satwalekar, President of Franklin Templeton – India, said, “Rahul will work closely with me in formulating the India fixed income strategy.”

According to the company, Goswami will oversee the debt schemes of Franklin Templeton Mutual Fund and has more than 24 years of experience in managing fixed-income funds. Before joining Franklin Templeton, Rahul was the CIO of fixed income at ICICI Prudential Asset Management.

Goswami said, “This is my second stint with the firm and I look forward to working with the team to expand the existing suite of fixed income funds as we look to grow our India fixed Income business.”

Kamath, on the other hand, will focus on alternative credit, covering both listed and unlisted corporate bonds and structured credit.

Satwalekar added, “In his new role as President and CIO of Franklin Templeton’s Alternatives business in India, Santosh’s focus will be on developing and launching Credit Alternatives products targeted at the sophisticated investor.”

Kamath said, “Franklin Templeton is one of the largest managers of alternative assets globally, with $257.2 billion in alternate assets under management as of June 30, 2023 and we are confident of building a strong alternatives business in India.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Franklin Templeton repays investors of two debt funds

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Franklin Templeton India mutual fund will repay an amount of Rs 178.06 crore to investors of two of its wound-up debt schemes, starting June 14 across two of its schemes.

The fund house announced that it will pay off Rs 39.27 crore to investors of Franklin India Short Term Income Plan (FISTIP). It will also pay 138.79 crore to investors of Franklin India Credit Risk Fund (FICRF). The fund announced that the payment will be made electronically to all eligible unitholders by SBI MF.

After this payout, Franklin Templeton would have paid a cumulative amount to the tune of Rs 27109.34 crore. All the six schemes have paid more than 100 percent of the schemes’ assets under management at the time of winding it up. While some of Franklin Templeton’s exposures have defaulted on their debt obligations, several of its exposures continued to service the debt repayments and there were also securities that were sold at a profit. This has led to the cash distribution being over 100 percent.

Additionally, after this week’s payout, Franklin Templeton mutual fund pays off all the debts of- and extinguishes units in- five of six debt funds. Only one scheme- FISTIP- would remain.

In April 2020, Franklin Templeton India Mutual Fund shocked investors when it abruptly wound up six debt funds. On April 23, 2020, the fund house announced that it was winding up the six debt schemes – Franklin India Ultra Short Bond Fund (FIUBF), Franklin India Low Duration Fund (FILDF), Franklin India Short Term Income Plan (FISTIP), Franklin India Income Opportunities Fund (FIIOF), Franklin India Credit Risk Fund (FICRF) and Franklin India Dynamic Accrual Fund (FIDAF).

While the fund house has paid off all its unit holders of almost all the schemes, it continues to pay off as it recovers money that is stuck in securities earlier marked down to zero.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Franklin Templeton renames its India Saving Fund to India Money Market Fund

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Franklin Templeton Mutual Fund on Wednesday announced the change in scheme name of “Franklin India Saving Fund” to “Franklin India Money Market Fund”, with effect from May 15, 2023.

Franklin India Saving Fund is an open ended debt scheme investing in money market instruments. The scheme is categorised as a Money Market Fund.

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“In order to align the scheme name with category of the scheme, the name of “Franklin India Saving Fund” stands changed to “Franklin India Money Market Fund” (Scheme) with effect from May 15, 2023,” an official statement from Franklin Templeton Mutual Fund stated.

“All the other terms and conditions of the Statement of Additional Information, Scheme Information Document & Key Information Memorandum of the Scheme, read with the addenda issued from time to time will remain unchanged,” it added.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

ED conducts searches on Franklin Templeton’s top management

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Enforcement Directorate has conducted searches at the residence of the top management of Franklin Templeton Mutual Fund, sources tell CNBC TV18. The searches are in connection with irregularities regarding withdrawals of investments from six debt schemes before they were closed on April 23, 2020. According to sources, the searches took place at the residences of CIO Sanjay Sapre, ex- India President Santosh Kamath, ex- Head of APAC Distribution-Vivek Kudva and his wife- Rupa Kudwa.

Franklin Templeton Mutual Fund came under the regulatory scanner after they shut their six debt schemes in April, 2020 leading to several law suits against the fund house across the country. Sebi in its order dated June 7, 2021 had referred to Vivek and Rupa Kudwa’s redemption of investments as an “unfair trade practice’. In its statement, Franklin mutual fund said that, “We continue to cooperate with all regulatory and statutory authorities and provide all data and information required by them. Franklin Templeton places great emphasis on compliance with regulations, and we have appropriate policies in place, consistent with Indian regulations and global best practices.”

SEBI in its June, 2021 notification said that Vivek and Rupa Kudva and Rupa Kudva’s late mother Vasanthi redeemed their personal investments from the six debt schemes of Franklin Templeton Mutual Fund based on confidential and non-public information. Franklin Templeton Mutual Fund had suspended redemptions for more than 300,000 investors in its six debt schemes.

According to the fund house, the six schemes which are in the process of winding up, as of March 16, 2023, have already distributed Rs 26,931.27 crores to unitholders, amounting to 106.81% of the aggregate reported AUM value as of April 23, 2020. The total amount disbursed so far ranges between 99.32% and 112.46% of the respective reported AUM values of the six funds as of April 23, 2020. At the time of each distribution, the Net Asset Value of each of the schemes was higher than it was on April 23, 2020.

“Five of the six funds have returned over 100% of the AUM at the time of the winding up decision on April 23, 2020. 4 out of 6 schemes have liquidated all performing securities and there is only one issuer with three performing securities remaining to be liquidated in the other two schemes. The AMC is continuing to support the ongoing liquidation process by a third-party liquidator,” the fund house said.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Franklin Templeton to give Rs 88 crore to unitholders of shut debt MF schemes

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Franklin Templeton Mutual Fund will release the next tranche of funds in two out of the six schemes that were shut in April 2020 due to a liquidity crisis. The fund house has said that a total amount of Rs 88.32 crore will be disbursed by the Supreme Court appointed liquidator, SBI Funds Management Pvt. Ltd from February 22 onwards.

This tranche of money will go to the investors of Franklin India Short Term Income Plan and Franklin India Credit Risk Fund.

According to Franklin Templeton Mutual Fund, the total cash available in Franklin India Short Term Income Plan is Rs 62.72 crore and the AUM as on 17 is Rs 491.24. The total disbursable amount will be 12.77 percent.

This disbursal will bring the total distribution from the scheme to 99.32 percent of the AUM as on 23 April 2020, the day the schemes were shut. In Franklin India Credit Risk Fund, the total cash available as on 17 February 2023, is 25.60, while the AUM stands at Rs 160 crore. The fund will disburse 16 percent of the total AUM this week taking the total distribution to 109.34 percent.

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After this tranche, the total amount distributed in the 6 shut schemes will stand at Rs 26,931.27 crores amounting to 106.81 percent of the AUM as on April 23, 2020.

“Five out of six schemes have returned over 100 percent of the AUM at the time of winding up. The total amount disbursed so far ranges between 99.32 percent and 112.46 percent of the respective AUM of the six schemes as of April 23, 2020. Four out of six schemes have liquidated all performing assets and extinguished all units. At the time of each distribution, the NAV of each scheme was higher than on April 23, 2020,” a communication from Franklin Templeton Mutual Fund noted.

SBI Fund Management will make the payments electronically or via cheque, demand draft to all eligible unit holders. FTMF has said that the payments till date, any recoveries or receipts from securities which are currently valued at zero or have matured but defaulted on their repayment obligation, shall be paid out to investors as and when such amounts are recovered.

Franklin Templeton had shut its six debt mutual fund schemes in April, 2020 following a liquidity crisis in the debt market after the outbreak of Covid-19 pandemic. After a series of cases in lower courts in different parts of India, the Supreme Court of India appointed SBI MF as the legal liquidator in the matter. ​

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Global outlook 2023 | Central banks’ policies to create opportunities for investors: Franklin Templeton

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Inflation and the possibility of recession remain the global market’s focal point in 2023, said Stephen Dover, CFA, Chief Market Strategist at Head of Franklin Templeton Institute. He expects inflation to further recede as supply chain pressures ease and central banks will remain committed to tighter policy. However, the result of this policy is likely to be a slowing of the economy and create opportunities for investors, he added.

“Europe is likely already in a recession and the United States is likely to fall into one—hopefully a mild one. Risk/reward profiles seem to favor fixed income over global equities, particularly for the first half of 2023. Any recession and subsequent recovery may well be rapid and create market volatility. We believe it will be as important as ever to be diversified and actively select investments, particularly when tilting toward risk assets,” Dover said in his global investment outlook.

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Expensive equity prices and the potential for a peak in interest rates have been driving a preference toward fixed income. So, Dover expects investors to search for quality and perhaps increase duration in 2023, with some ideas to consider:

• Extending duration may provide compelling income opportunities, and US Treasuries could be the core for building duration.
• Investment-grade (IG) corporates look like an attractive place to us for investors seeking relatively safe income.
• High-yield (HY) credit looks attractive for investors with a multi-year time horizon, in our view, as current yields and active selection provide a cushion for potentially near-term higher defaults in the sector.
• The key takeaway: “Don’t fight the Fed.” Bonds will likely rally as the US Federal Reserve (Fed) achieves its goals, whether the US economy’s landing is soft or hard. Equities are less likely to perform as well—unless the landing is soft. Otherwise, falling profits will offset falling bond yields and equities are unlikely to advance. That outcome is also a recipe for elevated equity volatility.
• Some investments can act as a hedge against inflation and potential downgrades in earnings. The impact of inflation on listed infrastructure in 2023 should be muted, particularly for regulated assets, which often have inflation adjustment clauses. Infrastructure earnings look better protected in general than global equity earnings, in our view.
• Historically, US commercial real estate investment has performed favorably in periods of rising interest rates and inflation. Current macro risks and market dislocations may create attractive buying opportunities over the next 12-18 months in some sectors of commercial real estate.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Franklin Templeton launches NFO — Should you invest in it?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The fund or the category works for those investors who are unclear about the asset allocation they should maintain and would want to leave it to a fund manager to take that decision for them 

Franklin Templeton Mutual Fund (Franklin MF) has recently announced the launch of Franklin India Balanced Advantage Fund (FIBAF). The new fund offer (NFO) will open for subscription on August 16 and close on August 30.

This is Franklin’s first new scheme since a regulatory crisis following its decision to wind up six of its debt schemes in April 2020.

Here are key things to know:

About the fund

Franklin Templeton’s NFO is a balanced advantage fund.

According to the fund house, the new fund is for investors looking for a balanced exposure to equity and debt over the long term while also capitalising on opportunities provided by the market from time to time.

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What exactly is a balanced advantage fund (BAF)?

Balanced advantaged fund or BAF is a hybrid fund that has a mix of equity and debt assets. Also known as dynamic asset allocation funds (DAAFs), these funds dynamically balance the asset allocation depending on the market conditions.

How does BAF work?

These funds invest in a mix of stocks and securities, and at times may even have an arbitrage component. They keep changing this allocation based on the market conditions.

This varies from fund house to fund house, but the point is that there is a dynamic allocation of equity and debt based on the markets — how expensive or how cheap the markets are.

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BAF cuts exposure to equity and increases investments in debt products when the market is overvalued and cuts debt exposure and increases investments in equity when markets are undervalued. So, this helps in taking advantage of lower valuations and generates considerable returns

Who should invest in the said NFO?

According to Shweta Rajani, Head, Mutual Funds, Anand Rathi Wealth Limited, investors who are unclear about the asset allocation can take a shot here.

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“The new fund offer is a balanced advantage fund where the fund manager would invest in equity and debt asset class and actively manage allocations between them. The allocation to equity would be decided based on certain valuation measures like P/E and P/B. At times the fund may also take exposure to index futures to balance risk. The fund or the category works for those investors who are unclear about the asset allocation they should maintain and would want to leave it to a fund manager to take that decision for them,” Rajani said.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow