Mutual Fund News : Franklin Templeton's First NFO Launch Post debt fund crisis to open on August 16, 2022

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Franklin Templeton Mutual Fund on July 26, 2022 announced the launch of a new balance advantage fund – Franklin India Balanced Advantage Fund (FIBAF). This is the first new scheme in around two-and-a-half years since the regulatory crisis following the decision to wind up six of its debt schemes in April 2020.

Franklin Templeton Mutual Fund has received approval from SEBI to launch a balanced advantage fund. The balanced approach of investing is a good option for achieving your medium to long-term goals, it offers the potential to generate respectable returns over the long term.

Franklin India Balanced Advantage Fund (FIBAF) offers tactical allocation between equity and debt based on market valuations and fundamental factors-driven views. It is a dynamically-managed fund, whose equity exposure will be maintained between 65% and 100%. If the equity allocation falls below 65%, the gross equity exposure will be maintained using equity derivatives. When equities are over-valued, the fund reduces equity exposure, while at the same time increasing debt exposure and vice versa.

Mr Anand Radhakrishnan, MD & CIO-emerging markets equity (India) at Franklin Templeton, said, “We believe in growing assets by delivering performance. Having said that, this is one category that is large and we are not present in it. We want to plug that gap.”

Mr Avinash Satwalekar, President at Franklin Templeton–India, said, “This new fund is for investors looking for a balanced exposure to equity and debt over the longer term while also capitalizing on opportunities provided by the market from time to time. Apart from the benefits of diversification, this formula-driven approach with its in-built ‘buy-sell’ discipline helps to negate the behavioural biases caused due to emotions of greed and fear.”

Franklin Templeton Mutual Fund went through a difficult period after it shut its six debt schemes due to lack of liquidity in debt markets. While the schemes have now largely returned the funds to the investors, the legal proceedings have not yet concluded. The fund house’s brand image has taken a bit of a beating and it is working on rebuilding investors’ trust.

However, Franklin Templeton Mutual Fund had taken a conscious decision to not launch any new debt schemes until the regulatory matter is resolved. The proposed new scheme falls in the equity-oriented fund category.

The New fund offer will open for subscription on August 16, 2022 and closes on August 30, 2022.