what will be the probable maturity period of franklin low duration fund?
as mentioned in the notification that NAV of the schemes will be displayed regularly. So if the fund is wind up then, will there be no downgrading of NAV, which will eventually bring the investment value further lower??
what will happen if the companies in which franklin have invested the money, get defaulted??
Is there any sort of guarantee that we will receive our money back???
No, there hasn’t bee any downgrade or defaults in any of the bonds. Because of the continuing redemptions pressure, Franklin has been unable to sell bonds to pay the redemption proceeds. This is why they had borrowed money and finally decided to wind down the schemes.
Unfortunately, nothing in the markets have a guarantee. As of today none of the holdings have defaulted.
My understanding is that they had to lockdown their schemes because they had lots of redemption pressure and ONLY way to honour redemptions was to sell good quality bonds as they are the ones with liquidity, resulting in decreasing exposure to good bonds/etc and eventually increasing exposure to bad bonds.
My question is why couldn’t have they used the concept of side-pocketing earlier in the picture? Or side-pocketing is only allowed for “junk” bonds?
The basic fundamental rule of MF is to invest for the long term. This is one of the reasons why NAV’s are published once a day. Real-time NAV update makes no sense for MF. But yeah, not sure if there is any such facility.