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Franklin Templeton: The Company Was Founded in 1947 in New York by Rupert H. Johnson, SR

Franklin Templeton is a global investment firm founded in New York in 1947 and headquartered in San Mateo, California. It established operations in India in 1996 and launched its first mutual fund there in 1996. In 2020, Franklin Templeton decided to wind up six of its Indian debt mutual fund schemes with total assets of Rs 26,000 crore due to significant reductions in liquidity in the Indian bond markets and unprecedented levels of investor redemptions following the COVID-19 outbreak. The company said it was unable to sell its investments to meet redemption demands because the current uncertain economic situation had made investors highly risk averse.

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103 views2 pages

Franklin Templeton: The Company Was Founded in 1947 in New York by Rupert H. Johnson, SR

Franklin Templeton is a global investment firm founded in New York in 1947 and headquartered in San Mateo, California. It established operations in India in 1996 and launched its first mutual fund there in 1996. In 2020, Franklin Templeton decided to wind up six of its Indian debt mutual fund schemes with total assets of Rs 26,000 crore due to significant reductions in liquidity in the Indian bond markets and unprecedented levels of investor redemptions following the COVID-19 outbreak. The company said it was unable to sell its investments to meet redemption demands because the current uncertain economic situation had made investors highly risk averse.

Uploaded by

Tanya Mendiratta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Franklin Templeton

Franklin Resources Inc. is an American holding company that, together with its
subsidiaries, is referred to as Franklin Templeton; it is a global investment firm
founded in New York City in 1947 as Franklin Distributors, Inc. It is listed on
the New York Stock Exchange under the ticker symbol BEN, in honor
of Benjamin Franklin, for whom the company is named. The company was
founded in 1947 in New York by Rupert H. Johnson, Sr.

Franklin Templeton's association with India dates back to over 2 decades as an


investor. As part of the group's major thrust on investing in markets around the
world, the India office was set up in 1996 as Templeton Asset Management India
Pvt. Limited. It flagged off the mutual fund business with the launch of Templeton
India Growth Fund in September 1996, and since then the business has grown at a
steady pace.

Franklin Templeton Mutual Fund has decided to wind up six debt mutual fund
schemes. Investors in these schemes will not be able to buy or sell these schemes
anymore. No SIP/STP/SWP will work on these schemes. The six schemes are:
Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund,
Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin
India Ultra Short Bond Fund and Franklin India Income Opportunities Fund. These
schemes manage assets worth Rs 26,000 crore.

India’s financial sector is under intense strain, grappling with a crushing liquidity
crisis. Due to the uncertainty, investors began to panic and took to redemption,
especially in credit risk funds such as the ones run by Franklin Templeton. To meet
redemptions, a fund house typically dips into cash reserves or sells underlying
scrips. Even that wasn’t enough, according to Templeton, which forced it to take
the decision to wind up the six funds.

The company is doing it due to the Significantly reduced liquidity in the Indian
bond markets for most debt securities and unprecedented levels of redemptions
following the Covid-19 outbreak and lockdown have compelled them to take this
decision, as told by Sanjay Sapre, president, Franklin Templeton India. It means
that the company is not able to sell its investments because there are no takers in
the market. The current uncertain situation in the economy and the market has
made investors extremely risk averse. They want to play it safe and do not want to
buy lower-rated and unrated papers. The fund is not able to sell investments to
meet the redemption pressure.

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