Mutual Funds

How much will investors receive in Franklin MF’s September 2021 payout?

Maulik Madhu | Updated on September 04, 2021

Following the Supreme Court’s earlier direction, Franklin Templeton MF had distributed Rs. 9,122 crore to investors of its wound up debt MF schemes in February

Low Duration Fund investors are set to recoup their entire April 2020 investment in the scheme, and some more. Those stuck in the Ultra Short Bond Fund are close to full recovery

BL Research Bureau

Franklin Templeton MF recently announced the distribution of ₹2,919 crore to investors of its six shut debt mutual fund schemes. This is the sixth tranche of distribution by the AMC after the debt scheme shutdown on April 23, 2020.

After the latest disbursement, investors will have so far received ₹23,999 crore. Those invested in Franklin Templeton MF’s Low Duration Fund and Ultra Short Bond Fund will have recouped the most (in percentage terms) of their original investment stuck in these schemes.

SBI MF will handle the payout which will commence from September 1, 2021 for investors with KYC (know your customer) compliant accounts.

Who gets what

Investors of Franklin India Ultra Short Bond Fund will receive ₹415 crore in the latest tranche. The cash distribution will amount to ₹208 crore for the Low Duration Fund, ₹950 crore for the Short Term Income Plan, ₹567 crore for the Income Opportunities Fund, ₹346 crore for the Credit Risk Fund and ₹433 crore for the Dynamic Accrual Fund investors. The shut schemes have received inflows in the form of maturities, part payments, pre-payments and coupons on the debt securities in their portfolio since their closure last year.

After the latest payout, the Short Term Income Plan investors will have been returned 84.4 per cent (the lowest proportion) and the Low Duration Fund investors 107.9 per cent (the highest proportion) of their April 2020 investment in the respective schemes. For investors of the Ultra Short Bond Fund and the Income Opportunities Fund, the percentage of original investment recouped will be 99.6 per cent and 94.5 per cent respectively. Investors in the Credit Risk Fund and the Dynamic Accrual Fund will have each received around 93 per cent of their April 2020 investment at the end of the latest disbursement.

What to expect

As per the latest maturity profile of the schemes as on August 31, 2021, the Ultra Short Bond Fund and the Low Duration Fund will be able to encash almost all their assets by April 2024. The other three schemes, the Dynamic Accrual Fund, the Short Term Income Plan and the Credit Risk Fund are expected to encash up to 95 per cent, 93 per cent and 90 per cent, respectively of their assets by April 2025 and the rest only after that.

In case of the Income Opportunities Fund, 93 per cent of the scheme assets are expected to be encashed by April 2025 and the remaining after that. This is significantly better than the 78 per cent encashment expected only a month ago.

The maturity profiles of all the schemes assume that all securities will be held until maturity and all interest payments and principal repayments will be made in full.

Published on September 03, 2021

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