Chattel Form Paper Withdrawal In Franklin
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SBI Funds Management has completed the sale of assets in the six suspended debt scheme of Franklin Templeton Mutual Fund as directed by the Supreme Court and distributed ₹27,508 crore to the unit holders.
The Trustee of Franklin Templeton decided to wind up six of our debt schemes in April 2020. The difficult decision was taken because the markets had become illiquid due to the severe impact of COVID-19. The sole objective of this decision was to safeguard value for our investors.
Facing a wave of redemptions from anxious investors, the fund house was staring at the unpleasant scenario of undertaking a fire sale of its securities. The only way out to preserve value for investors was to down the shutters.
Investors were left shaken when Franklin Templeton took the unprecedented decision to wind up six of its debt funds on 23 April 2020. A crippling market dislocation, fed by the onset of the Covid pandemic, had out liquidity from the funds' underlying holdings.
The total minimum investment amount is $1,000 per fund unless the account(s) will be funded by Automatic Investment Plan.
Majority of Mutual Fund schemes are open end schemes, which allow an investor to redeem the entire invested amount without any time restrictions. Only under few instances schemes impose a restriction on redemption, under extraordinary circumstances, as decided by the Board of Trustees.