Franklin Templeton crisis: Short-term bond market is in deep trouble

Franklin Templeton’s decision to shut down six schemes oriented towards high yield investments will add to the stress in the short-term debt market, which is now well into a crisis. The six schemes collectively have assets under management of around Rs 25,000 crore, according to reports.

The decision has been prompted by lack of liquidity in the high-yield market, as well as heavy redemption pressures that are affecting all debt funds. The fund house will now try to manage an orderly liquidation of these assets so as to realise the maximum possible value for unit-holders. These schemes have a fair