NEW DELHI: Starting August 18, asset management company (AMC) Franklin Templeton placed restrictions on the amount of investment that investors could make in three of its fund of funds (FoF) schemes. All three had been exposed to a few of the six debt schemes that the AMC has been forced
to wind up — even as litigation related to these funds continue.
A company spokesperson explained that this was a means to curb the number of arbitrage opportunities that new investors in the fund will have, protecting existing investors’ investments.
From now, investors cannot buy units for more than Rs 2 lakh per day in Franklin India Dynamic Asset Allocation (FIDA), Rs 1 lakh in Franklin India Multi-Asset Solution (FIMAS), Rs 50,000 in the 20’s Plan and 40s Plan of Franklin India Life stage (FILS) and Rs 25,000 in the 30s Plan and 50’s Plus Plan of Franklin India Life Stage.
These curbs have been made applicable to all fresh and additional purchases from lump-sums to SIPs or STPs. According to the firm, the limits also apply for all purchases across investor folios and plans of schemes based on the Permanent Account Number of the investor. However, existing SIPs and STPs and redemptions from these schemes will remain unaffected.
All three FoFs had been impacted significantly by the winding up of the six Franklin debt funds.
In fact, their net asset value had been shaved off by a half in order to reflect the illiquidity of their exposure to these debt funds.