Franklin Low Duration
Franklin Dynamic Accrual
Franklin Credit Risk Fund
Franklin Short Term Income
Franklin Ultra Short Bond
Franklin Income Opportunities Fund
What does it mean?
These schemes are shutting down, and will not exist in the future. As a result, the fund house has declared that there will not allow any further transactions in them – no fresh purchases and no redemptions
Will investors get any money?
It will work like, say six entire schemes are being side-pocketed. So, the day they earn any interest or collect from maturity of their holdings, the money will be distributed among all investors. The overall process could take anywhere between six months to one year, depending on the maturity of the underlying papers. FT will declare net asset values of these schemes on a daily basis.
Will there be any cost involved?
No, the fund house will not charge you any expense ratio. But there could a minor operational expenses.
What will be the tax implication?
Payments will be treated as redemption of units. If total duration of investment at the time of payout is less than three years, capital gains will be taxed at the investor’s applicable tax rate. If it exceeds three years, capital gains will be taxed at 20 per cent with indexation.