NFO Watch: Franklin Templeton Mutual Fund launches Medium to Long Duration Fund

Franklin Templeton Mutual Fund has announced the launch of Franklin India Medium to Long Duration Fund, an open-ended medium-term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between 4 and 7 years with relatively high interest rate risk and relatively moderate credit risk.

The new fund offer or NFO will open for subscription on September 3 and close on September 17. The scheme will reopen for continuous sale and repurchase on September 26.

The scheme will be benchmarked against CRISIL Medium to Long Duration Debt A-III Index and will be managed by Chandni Gupta and Anuj Tagra.

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The scheme will allocate 0-100% in debt and money market instruments, cash and cash equivalent, including government securities.

The minimum investment amount for the fresh purchase is Rs 5,000. For SIP, the minimum investment amount is Rs 500. For additional purchases, it is Rs 1,000 and, for redemption, it is Rs 1,000. The amount for subscription and redemption, in excess of the minimum amount specified above, is any amount in the multiple of Re 1.The fund will look to invest in debt and money market instruments like non-convertible debentures, bonds, certificates of deposits, commercial papers, treasury bills and government securities, while maintaining a duration between 4 and 7 years. “FIMLDF will be dynamically managed, allowing it to adjust its duration exposure in response to changing macro environment, and it may be an ideal investment option for investors looking to deploy money in fixed income funds as a part of their strategic investment allocation,” said Chandni Gupta, Vice President and Portfolio Manager, India Fixed Income, Franklin Templeton Mutual Fund.

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“We foresee robust domestic economic growth with a shallow rate cut cycle leading to a steeper yield curve. The fund aims to generate accrual income while opportunistically managing duration risk to deliver superior risk-adjusted returns,” said Anuj Tagra, Vice President and Portfolio Manager, India Fixed Income, Franklin Templeton Mutual Fund.

The scheme is suitable for investors seeking income generation/capital appreciation over the medium- to-long -term and want investment predominantly in debt and money market instruments with portfolio Macaulay duration between 4 and 7 years.

“We are expanding our fixed income range, having identified gaps spanning major categories in the high credit space. FIMLDF caters to investors looking for a product that can adapt to market cycles and invest in quality debt instruments. Our investment team will use top-down analysis to determine portfolio maturity and a bottom-up approach to security selection and aim to invest in a mix of government securities and corporate debt. The Indian market offers great opportunities for long-term players like Franklin Templeton, and we plan to continue bringing innovative solutions, and global best practices to our investors and partners in India,” said Avinash Satwalekar, President, Franklin Templeton–India.