Franklin Templeton launches low-duration debt fund; key details here

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

 

Franklin India Low Duration Fund is benchmarked against the NIFTY Low Duration Debt Index A-I. The risk for the fund, as well as the benchmark, according to the Scheme Information Document (SID), remains moderate.

 

Franklin India Low Duration Fund will remain available for subscription until March 5, 2025, during which the fund will be available at Rs 10 per unit. The scheme reopens for continuous sale and repurchase on March 7, 2025.

 

 

The minimum requirement for an SIP in the fund is Rs 500. The exit load for Franklin India Low Duration Fund remains nil.

 

Franklin India Low Duration Fund 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.

 

“Franklin India Low Duration Fund aims to focus on high-quality papers of various maturities with an 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,” said Goswami.

 

Meanwhile, Chandni Gupta added, "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 asset class diversification as well as assist in building an emergency corpus. Besides, investors can also start a Systematic Withdrawal Plan (SWP) from the fund as a source of regular income.”

 

"The objective of the scheme is to generate income by investing in debt and money market instruments, with the 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," reads the SID.

 

The fund will aim to invest across low-duration debt securities issued by the government and corporates, and money market instruments like certificates of deposit, commercial papers, and treasury bills.

 

It is ideal for investors seeking regular income for the short term, as well as for those seeking an investment in a portfolio of low-duration debt and money market securities.