Franklin Templeton Introduces Franklin India Low Duration Fund for Short-Term Investors
An open-ended low-duration debt fund has been launched by Franklin Templeton (India) called Franklin India Low Duration Fund (FILDF). This fund opens today, i.e., 25th February 2025, with the goal of investing in low-duration government and corporate debt securities. This will also invest in money market instruments to make sure the average duration of receiving the money from the investment will range between 6 and 12 months.
The NFO of this fund will end on March 5, 2025, for subscription; till then, it will be available at Rs.10 per unit. The minimum amount of investment for SIP is set to Rs.500.
For the purpose of repurchasing and reselling the scheme will reopen on March 7, 2025.
Rahul Goswami and Chandni Gupta will be managing FILDF and the fund will be benchmarked against NIFTY Low Duration Debt Index A-I.
Franklin India Low Duration Fund invests in high-quality securities of varied maturities with a low Macaulay duration. The fund’s objective is to achieve maximum risk-adjusted returns through optimal asset selection, and therefore, it can be invested for short- as well as medium-term periods. Considering the existing macroeconomic backdrop of positive real interest rates, a potential shallow and short rate cut cycle, and high short-term rates, the fund can generate stable returns.
The main goal of this scheme is to generate income through the investment in debt and money market instruments with a Macaulay duration of the portfolio ranging between 6 and 12 months. However, it is not sure that the goal of this fund will be achieved successfully.
The FILDF portfolio would be constructed upon three fundamental pillars: having lower duration, maintaining high liquidity, and constructing a high-grade credit portfolio. Through this strategy, investors would have the benefit of a low-volatility product with lower exposure to credit risk. The scheme can also provide asset class diversification and contribute to the establishment of an emergency corpus. An investor can even initiate a systematic withdrawal plan (SWP) from the scheme, offering a regular income source prospect.
As per Franklin Templeton (India), this fund is well suited for those investors who want an investment within the horizon of 6 to 12 months. The exit load of this fund stays nil.
The fund is tracked against the NIFTY Low Duration Debt Index A-I. The fund has a high level of risk, and the benchmark is very high.
