List of 6 mutual funds closed by Franklin Templeton – business news

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Franklin Templeton Mutual Fund, one of the first global financial firms to launch asset management operations, has announced it will close six fixed-income and credit-risk funds in India from April 23 as the coronavirus pandemic has worsened credit market strains.

Franklin Templeton said in a statement posted on its website on Thursday that winding up the funds is the “only viable option to preserve value for investors and to enable an orderly and equitable exit” for all unitholders.

“There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the Covid-19 crisis and the resultant lock-down of the Indian economy,” the asset manager said.

Franklin Templeton to close 6 India funds: What does it mean for you

Here is the list of mutual funds closed by Franklin Templeton:

FRANKLIN INDIA ULTRA SHORT BOND FUND

This fund endeavoured to strike an optimum balance between regular income and high liquidity. The balance was achieved through a judicious mix of short term debt and money market instruments.

Tax benefits

* Long term capital gains (LTCG) tax @20% (plus surcharge, if applicable and cess) with indexation if units were held for more than 36 months

* Short term capital gains (STCG) tax at the income tax slab rate if units were held for less than 36 months

* Dividends were taxable in the hands of investors and the mutual fund deducted TDS @10% for resident investors and @20% (plus applicable surcharge and cess) for non-resident investors before payouts/re-investment. Investors could claim tax-credit of TDS deducted at the time of filing their annual return.

* In case of an investor being NRI, LTCG tax was chargeable @ 10% (plus surcharge, if applicable and cess) without indexation relating to units redeemed from unlisted schemes.

Ideal investment horizon

The recommended investment horizon was one month or more.

FRANKLIN INDIA LOW DURATION FUND

This fund focussed on the lower end of the yield curve and primarily invested in corporate bonds and other fixed-income instruments.

Tax benefits

* Long term capital gains (LTCG) tax @20% (plus surcharge, if applicable and cess) with indexation if units were held for more than 36 months

* Short term capital gains (STCG) tax at the income tax slab rate if units were held for less than 36 months

* Dividends were taxable in the hands of investors and the mutual fund deducted TDS @10% for resident investors and @20% (plus applicable surcharge and cess) for non-resident investors before payouts/re-investment. However, investors could claim tax-credit of TDS deducted at the time of filing their annual return

* In case of an investor being NRI, LTCG tax was chargeable @ 10% (plus surcharge, if applicable and cess) without indexation relating to units redeemed from unlisted schemes

Ideal investment horizon

The recommended investment horizon was three months or more.

FRANKLIN INDIA SHORT TERM INCOME PLAN

The fund aimed to provide stable returns by investing in fixed income instruments. It invested primarily in short term corporate bonds with a focus on higher interest income.

Tax benefits

* Long term capital gains (LTCG) tax @20% (plus surcharge, if applicable and cess) with indexation if units were held for more than 36 months

* Short term capital gains (STCG) tax at the income tax slab rate if units were held for less than 36 months

* Dividends were taxable in the hands of investors and the mutual fund will deduct TDS @10% for resident investors and @20% (plus applicable surcharge and cess) for non-resident investors before payouts/re-investment. However, investors could claim tax-credit of TDS deducted at the time of filing their annual return

* In case of an investor being NRI, LTCG tax was chargeable @ 10% (plus surcharge, if applicable and cess) without indexation relating to units redeemed from unlisted schemes.

Ideal investment horizon

The recommended investment horizon was one year or more

FRANKLIN INDIA DYNAMIC ACCRUAL FUND

This fund was positioned in the dynamic bond fund category that focuses on investing in fixed income instruments across duration. It strove to generate high accrual income through exposure to corporate bonds.

It aimed to generate capital appreciation by actively managing the fund’s portfolio on interest rate movements.

Tax benefits

* Long term capital gains (LTCG) tax @20% (plus surcharge, if applicable and cess) with indexation if units were held for more than 36 months

* Short term capital gains (STCG) tax at the income tax slab rate if units were held for less than 36 months

* Dividends were taxable in the hands of investors and the mutual fund deducted TDS @10% for resident investors and @20% (plus applicable surcharge and cess) for non-resident investors before payouts/re-investment. However, investors could claim tax-credit of TDS deducted at the time of filing their annual return

* In case of an investor being NRI, LTCG tax was chargeable @ 10% (plus surcharge, if applicable and cess) without indexation relating to units redeemed from unlisted schemes

Ideal investment horizon

The recommended investment horizon was four years or more

FRANKLIN INDIA INCOME OPPORTUNITIES FUND

The fund was for higher interest income with a medium portfolio duration. It primarily invested in corporate bonds and other fixed-income securities.

Tax benefits

* Long term capital gains (LTCG) tax @20% (plus surcharge, if applicable and cess) with indexation if units were held for more than 36 months

* Short term capital gains (STCG) tax at the income tax slab rate if units were held for less than 36 months

* Dividends were taxable in the hands of investors and the mutual fund deducted TDS @10% for resident investors and @20% (plus applicable surcharge and cess) for non-resident investors before payouts/re-investment. However, investors could claim tax-credit of TDS deducted at the time of filing their annual return.

* In case of an investor being NRI, LTCG tax was chargeable @ 10% (plus surcharge, if applicable and cess) without indexation relating to units redeemed from unlisted schemes.

Ideal investment horizon

The recommended investment horizon was two years or more.

FRANKLIN INDIA CREDIT RISK FUND

This fund was positioned as a fixed income fund that sought to maximise portfolio yield by primarily investing in AA and below rated corporate bonds (excluding AA+ rated corporate bonds).

The fund invested predominantly in corporate bonds and strove to provide regular income and capital appreciation.

Tax benefits

* Long term capital gains (LTCG) tax @20% (plus surcharge, if applicable and cess) with indexation if units were held for more than 36 months

* Short term capital gains (STCG) tax at the income tax slab rate if units were held for less than 36 months

* Dividends were taxable in the hands of investors and the mutual fund will deduct TDS @10% for resident investors and @20% (plus applicable surcharge and cess) for non-resident investors before payouts/re-investment. However, investors could claim tax-credit of TDS deducted at the time of filing their annual return.

* In case of an investor being NRI, LTCG tax was chargeable @ 10% (plus surcharge, if applicable and cess) without indexation relating to units redeemed from unlisted schemes.

Ideal investment horizon

The recommended investment horizon was three years or more.

(Source: Franklin Templeton India site)



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