NFO Features
New Fund Offer: December 1, 2009 – December 10, 2009
Scheme Re-opening on: December 21, 2009
Minimum Investment: Rs.5000 and in multiples of Re.1 thereafter.
Cap on investment: Rs 5 crore per application per day.
Options: Growth & Dividend (Payout & Reinvestment)
Entry Load: Nil
Exit load: In respect of each purchase of Units:
- 3% if redeemed within 6 months from the date of allotment
- 2% if redeemed after 6 months but within12 months from the date of allotment
- 1% if redeemed after 12 months but within 18 months from the date of allotment
Benchmark: Crisil Short Term Bond Fund Index
Fund Manager: Vivek Ahuja & Sachin Padwal Desai
Franklin Templeton Investments (India), the largest foreign fund house in the country*, is launching a new open end income fund called Templeton India Income Opportunities Fund (TIIOF). The fund has the ability to take concentrated exposure to a particular category of income securities based on the opportunities available. The New Fund Offer will be open from December 1, 2009 to December 10, 2009 during which, units will be available at Rs.10 per unit.
On the rationale for launching the new fund, Mr. Harshendu Bindal, President, Franklin Templeton India said, “Globally interest rates are at historical lows as Central Banks adopted an ultra accommodative monetary policy to support economic growth and boost systemic liquidity. We have witnessed this trend in India as well with low benchmark rates and easy liquidity – this has lowered the return potential of fixed income investment avenues”.
“In such a situation, fixed income investors are looking for investment avenues that can provide superior return potential (without taking undue credit risk) and stability of capital. TIIOF caters to this need and strengthens our fixed income product range. In the current environment, it will be focusing mainly on securitized and high yielding corporate debt, to take advantage of the yield premiums. Also the relatively high exit loads and a cap on maximum investment per folio make it a retail oriented product”
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Speaking about the fund’s strategy, Mr. Santosh Kamath, Chief Investment Officer – Fixed Income, added, “Our current analysis indicates that a portfolio focused on good quality securitized debt and NBFCs, has the potential to deliver superior returns. Within the securitized debt space we are looking to take exposure to single loan PTCs and ABS. We believe that a strengthening economy will lead to a contraction in spreads benefiting such securities and our focus on accruals is likely to help in mitigating the impact of any hardening of rates.
PTCs have been an important part of our portfolios for the past few years and we have built a considerable knowledge base and expertise. This provides us with an edge in terms of evaluating and using these securities in our portfolios. These securities currently offer an attractive spread over corresponding maturity bonds and their historical default rates (for investment grade) have been very low, through economic cycles. We would also be looking at corporate bonds that offer relatively high yields and are part of our investment universe.”
About Franklin Templeton
Franklin Templeton is the largest foreign fund house* in the country with over Rs.29,925 crores of average assets under management for around 25 lakh investor accounts (as of October 30, 2009). It manages one of the most comprehensive ranges of mutual funds (47) catering to varied investor requirements and offering different investment styles to choose from. It has Offices in 33 cities and Collection Centres in another 79 locations across the country.
Franklin Templeton Investments is one of the largest financial services groups in the world based at San Mateo, California USA. The group has US$ 523.1 billion in assets under management globally (as of October 31, 2009). Franklin Templeton has more than 60 years of experience in investment management and with offices in over 30 countries, provides investment management and advisory services to a client base of around 22 million unitholder accounts.
*Source: AMFI Website (as on October 30, 2009)