Franklin Templeton Mutual Fund on thursday announced it would wind up six yield-oriented, managed credit funds in india, effective april 23, citing severe market dislocation and illiquidity caused by the coronavirus. "The decision has been taken in order to protect value for investors via a managed sale of the portfolio," the Fund said in a statement. The decision was limited to funds which have "material direct exposure to the higher yielding, lower-rated credit securities in india that have been most impacted by the ongoing liquidity crisis in the market".
The funds included Franklin india Low Duration Fund, Franklin india Dynamic Accrual Fund, Franklin india Credit Risk Fund, Franklin india Short Term Income Plan, Franklin india Ultra Short Bond Fund and Franklin india Income Opportunities Fund, it said. Meanwhile rupee on friday depreciated by 40 paise to settle at 76.46 against the US dollar due to fears of capital outflows after Franklin Templeton Mutual Fund suddenly closed its six debt fund schemes.
Weak domestic equities and a strengthening greenback overseas also weighed on the local currency. Forex traders said market sentiment weakened after a potential antiviral drug for coronavirus reportedly failed its first trial. The rupee opened lower at 76.30 at the interbank forex market and then fell further to 76.47 before closing at 76.46, down 40 paise over its last close. The rupee had settled at 76.06 against the US dollar on Thursday. The rupee witnessed strong fallout again due to likely overseas outflows from local stocks amid some uncertainty after Franklin Templeton Fund closed six schemes, Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said.
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