Two more Franklin funds turn cash positive

Mumbai: Two more of the six debt schemes of Franklin Templeton Mutual Fund that have been shut down have turned cash positive, said the fund house in a communication to investors. With this, four out of the six schemes have now turned cash positive. This means all the money that these schemes receive will be used to pay back unitholders.

The latest to repay all the loans are Franklin India Low Duration Fund (FILDF) and Franklin India Credit Risk Fund (FICRF) with 5% and 1% of their respective assets under management (AUMs) available in cash.

The cash position of Franklin India Ultra Short Bond Fund (FIUBF) and Franklin India Dynamic Accrual Fund (FIDA) rose to 31% and 14% of their respective AUMs as of August 31.

The fund house informed investors that the six shuttered schemes of have received total cash flows of Rs 6,486 crore till August 31. In the last fortnight of August 15-31, the fund house has received Rs 1,498 crore as cash flows in these schemes. On April 23, six debt schemes collectively worth Rs 26,000 crore were wound up by Franklin Templeton MF due to illiquidity caused on account of the Covid-19 pandemic.
Investors in all these six schemes are stuck and cannot redeem any money as the fund house awaits directions from the Karnataka High Court. Franklin Templeton MF had decided to wind up these schemes on April 23. “Faster the resolution takes place the better it is for all unitholders as they shall be able to get access to their money,” said Amol Joshi, founder, Plan Rupee.

The fund house cannot disburse any money to unitholders as e-voting and meeting with unitholders continue to remain suspended with the case pending before the Karnataka High Court.