Mutual Funds

Who will get what in Franklin MF’s latest payout

Maulik Madhu BL Research Bureau | Updated on June 10, 2021

Low Duration Fund investors set to recoup 91 per cent of their investment; Ultra Short Bond Fund and the Low Duration Fund should be able to encash all their assets by April 2025

Franklin Templeton MF has announced the disbursement of ₹3,205 crore to investors of its six shut debt mutual fund schemes. This will be the fourth tranche of cash distribution since the schemes were closed in April 2020. Investors have so far received ₹14,572 crore.

How much

Investors of Franklin India Ultra Short Bond Fund will be paid ₹928 crore in the latest tranche. The cash distribution will amount to ₹ 106 crore for the Low Duration Fund, ₹1,135 crore for the Short Term Income Plan, ₹273 crore for the Income Opportunities Fund, ₹555 crore for the Credit Risk Fund and ₹209 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.

As a percentage of the respective schemes’ AUM as on April 23 2020, the latest payout will amount to 10 per cent for the investors of the Ultra Short Bond Fund and 4 per cent for those of the Low Duration Fund. For the Dynamic Accrual Fund and the Short Term Income Plan investors, this will come to 8 per cent and 20 per cent, respectively. Investors in the Income Opportunities Fund and the Credit Risk Fund will each be returned 16 per cent. 

After the latest payout, investors in the Income Opportunities Fund would have been returned 42 per cent (the lowest proportion) and those in the Low Duration Fund 91 per cent (the highest) of their April 2020 investment in the respective schemes. 

What’s left

As per the latest maturity profile of the schemes as on May 31, 2021, the Ultra Short Bond Fund and the Low Duration Fund should be able to encash all their assets by April 2025. Three schemes, Short Term Income Plan, Dynamic Accrual Fund and Credit Risk Fund are expected to encash up to 97 per cent, 92 per cent and 91 per cent, respectively of their assets by April 2025 and the rest after that. In case of the Income Opportunities Fund, 75 per cent of the scheme assets are expected to be encashed by April 2025 and the remaining beyond that.

The maturity profiles of 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 June 03, 2021

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