Mutual funds (MFs) are very competitive animals. So, if I don’t lend to a new company and keep money in overnight instruments, I earn 6.25 per cent. If I lend to a non-banking financial company, I earn 8.50 per cent. The over 200 basis point (bps) difference between overnight and three-month commercial paper is significant…,” Santosh Kamath, managing director and chief investment officer, Franklin Templeton (FT) Mutual Fund told a television channel 18 months back.
The 200 bps extra return has come back to bite the fund house. Last Thursday, it shut down six schemes with assets of around Rs 26,000
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