Franklin Templeton launches 'Franklin India low duration fund'; details

Franklin Templeton (India) has launched its open-ended low-duration debt fund - 'Franklin India Low Duration Fund (FILDF)'. The fund, which opens today, February 25, 2025, will aim to invest in low-duration government and corporate debt securities, as well as money market instruments like certificates of deposits, commercial papers, treasury bills, PSU/PFI Bonds, ensuring that the Macaulay duration of the portfolio ranges between 6 and 12 months.

 

The New Fund Offer (NFO) is set to close on March 5, 2025, during which the fund will be available at Rs 10 per unit. For an SIP, the minimum investment amount is Rs 500.

 

 

The scheme will reopen for continuous sale and repurchase on March 7, 2025.

 

FILDF will be managed by Rahul Goswami, chief investment officer & managing director, fixed income, and Chandni Gupta, vice president, portfolio manager, India fixed income, Franklin Templeton.

 

Commenting on the fund’s investment strategy, Goswami said, “Franklin India Low Duration Fund aims to focus on high-quality papers of various maturities with the overall objective to maintain a low Macaulay duration. The fund aims to optimize risk-adjusted returns while making it suitable for short and medium-term investments. The current macroeconomic environment, marked by positive real interest rates, a potentially shallow and short rate cut cycle, besides elevated short-term rates, supports the fund’s potential to generate consistent returns.”

 

The objective of the scheme is to generate income by investing in debt and money market instruments, with a Macaulay duration of the portfolio between 6 to 12 months. "However, there is no assurance that the investment objective of the scheme will be achieved."

 

"FILDF’s portfolio will be constructed on three key principles – lower duration, potential for high liquidity, and an aim to create a high-grade credit portfolio – thereby offering investors a low-volatility product with reduced exposure to credit risk. FILDF can help with asset class diversification as well as assist in building an emergency corpus. Additionally, investors can also start a Systematic Withdrawal Plan (SWP) from the fund as a source of regular income,” said Gupta. 

 

According to Franklin Templeton (India), the fund is ideal for investors with an investment horizon of 6 to 12 months. The exit load for the fund remains nil.

 

The fund is benchmarked against the NIFTY Low Duration Debt Index A-I. The risk level for the fund, as well as the benchmark, is ‘very high’.