Franklin Templeton is ready to roll out a new open-ended dynamic scheme that invests in dynamically managed portfolios of equity and equity-related securities, fixed income, and money market instruments.
Franklin Templeton (India) is preparing to launch a new scheme after a two-year hiatus. Franklin India Balanced Advantage Fund (FIBAF) is an open-ended dynamic asset allocation fund that intends to generate long-term capital appreciation and income by investing in a dynamically managed portfolio of equity and equity-related instruments and fixed income and money market instruments.
The New Fund Offer (NFO) opens on August 16, 2022, and will close on August 30, 2022, during which, units will be available at Rs.10/- per unit.
The fund allocates equity and debt tactically based on market valuations and fundamental factors. The product is suitable for those who want to benefit from growth opportunities offered by equities. It also seeks to minimize the risk of market volatility.
According to the company, FIBAF seeks to manage equity exposure through equity derivatives based on market valuations and fixed income exposure. The gross equity exposure is intended to be maintained between 65% and 100%. If the equity allocation falls below 65% at any point, the gross equity exposure will be maintained using equity derivatives. Debt instruments will make up for the rest. The fund is eligible for equity taxation if the allocation to the equity asset class is above 65% for the year.
Speaking on the launch of the fund, Avinash Satwalekar, President, Franklin Templeton–India, said, “We are excited to bring another diversified investment offering that helps investors navigate through changing markets, in a simple and efficient manner. We are eagerly looking forward to embarking on a new chapter of growth in India, and the launch of FIBAF represents a first of many steps to this end. “
“This new fund is for investors looking for a balanced exposure to equity and debt over the longer term while also capitalizing on opportunities provided by the market from time to time. Apart from the benefits of diversification, this formula-driven approach with its in-built ‘buy-sell’ discipline helps to negate the behavioural biases caused due to emotions of greed and fear”, he added.
Commenting on the fund launch, Anand Radhakrishnan, Managing Director & Chief Investment Officer – Emerging Markets Equity - India, Franklin Templeton, said, “Global equity markets have corrected in recent months and continue to be volatile amidst multiple headwinds of inflation, interest rate and ongoing geopolitical tensions. Indian markets have also been impacted but have held up much better compared to major developed and EM counterparts (in dollar terms).”
“The scheme will endeavour to invest in high quality instruments with over 80% of fixed income portfolio in AAA-rated papers. This makes it suitable for investors looking for the best of both worlds,” he added.
Franklin India Balanced Advantage Fund will also provide investors with a systematic withdrawal option, allowing them to withdraw a set amount at a predetermined frequency, subject to the conditions outlined in the Scheme Information Document.