It is rightly said that hard times teach valuable lessons! The Franklin Templeton saga has been a punishing lesson to investors. A couple of months ago, Franklin Templeton wound up six of its debt schemes alluding to severe redemption pressure and illiquidity in the bond markets amidst the ongoing corona virus crisis. While doing so, the fund house mentioned that this is the best possible way to safeguard the interest of existing investors. In fact, it recently recovered ₹2,666 crore in its six wound up schemes.
Therefore, as and when the debt instruments held by those funds reach maturity, Franklin Templeton would be able to recover the dues. However, it is a long journey ahead. The table below highlights the maturity profile of the six closed funds from Franklin Templeton. It can be seen that all the dues are expected to clear not before 2025. Therefore, to avoid such a situation it is always better to review your portfolio quarterly.
Listed below are a few pointers that will help you to be forewarned about any trouble that may be brewing in the debt funds you own.
The YTM Factor
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July 20, 2020