House equity

Franklin Templeton Mutual Fund launches new program after two years

Franklin Templeton Mutual Fund is launching a new program after a two-and-a-half-year hiatus. The fund house has received approval from Sebi to launch a balanced benefit fund. This will be Franklin Templton’s first product offering after facing harsh weather following its decision to shut down six debt programs in 2020.

FIBAF is a dynamically managed fund. Like other Laundered Advantage Funds or BAFs, equity exposure will be kept between 65% and 100%. At any time, if the equity allocation falls below 65%, the gross equity exposure will be maintained using equity derivatives. Debt instruments will make up the rest.

The NFO will open for subscription on August 16 and will close on August 30.

Avinash Satwalekar, President of Franklin Templeton–India, said, “This new fund is for investors seeking balanced exposure to equities and long-term debt while capitalizing on market opportunities from time to time. Along with the benefits of diversification, this formula-based approach with its built-in “buy-sell” discipline helps negate behavioral biases caused by the emotions of greed and fear. »

Anand Radhakrishnan, Managing Director and Chief Investment Officer – Emerging Markets Equities – India, Franklin Templeton, said: “Global stock markets have corrected in recent months and continue to be volatile amid multiple headwinds of inflation, interest rates and ongoing geopolitical tensions.Indian markets have also been affected, but have held up much better compared to major developed and emerging (USD) peers.Such bouts of market volatility can throw investors off course. cap and cause them to make sub-optimal decisions. With this in mind, the Franklin India Balanced Advantage Fund will adopt a flexi-cap approach to equity allocation. The program will seek to invest in high-quality instruments with more than 80% of the bond portfolio in AAA-rated paper, making it ideal for investors looking for the best of both worlds worlds. Asset allocation is derived from Franklin Templeton’s proprietary dynamic asset allocation model and an active stock selection process similar to a flexi-cap portfolio. We believe this will help improve outcomes for investors by allowing them to stay invested for longer periods of time.

“We will use a combination of quantitative and qualitative factors to determine equity asset allocation. The quantitative metric would be based on the month-end weighted average price-to-earnings (P/E) ratio and the price-to-book (P/BV) ratio of the Nifty 500 index. In accordance with the ratio ranges, the allocation corresponding equity will be identified separately for P/E and P/BV. These parameters will be assigned a weighting of 50% each and will be added to arrive at the final equity allocation. We would also overlay the stock allocation based on quantitative metrics with a qualitative assessment of various factors such as macroeconomic trends, political backdrop, overall company fundamentals, market liquidity patterns, etc. said K Rajasa, vice president and portfolio manager of Franklin India Balanced Advantage Fund. .

The legal battle surrounding the closure of Franklin’s six mutual fund plans is still ongoing at the SAT. Earlier, SEBI imposed heavy sanctions on top brass at Franklin Templeton India and the fund house was asked to refund fund management fees collected in the six closed schemes. SEBI had also banned the fund house from launching any new debt program for two years. The new hybrid fund will be Franklin Templeton’s second run after 2020.