Franklin Templeton plans re-entry into fixed income market
Franklin Templeton Asset Management plans to re-enter the fixed income space after abruptly abruptly stopping six debt schemes with assets of ₹20,215 crore due to a liquidity crisis in the debt market amid the Covid pandemic breakout in April 2020.
Avinash Satwalekar, President of Franklin Templeton-India, said the fund house will enter the fixed-income market in the next three months, and the initial process is underway.
“We have already appointed a fixed market expert who is working on the strategy for our re-entry in managing debt funds,” he added.
The fund house earlier appointed Rahul Goswami as chief investment officer and Managing Director – Fixed Income. He was previously at the helm of debt investments at ICICI Prudential AMC.
“It is the right to have debt investment as part of portfolio diversification for investors with over three years of investment horizon,” he said at the sidelines of an event to launch Franklin India Multi-cap new fund offer, which opens for subscription on July 8.
Ready for growth
Janakiraman R, Chief Investment Officer-Emerging Markets Equity-India, Franklin Templeton, said with 50 per cent exposure to small and mid-cap stocks, the multi-cap fund is well poised to capture the strong growth of the Indian economy on the back of prudent fiscal policies and political stability.
However, he said that with the valuation on the higher side, investors should tone down their expectations and returns in the next three years will be lower than what they have earned in the previous years.
Having said that corporate profit to GDP has started moving up and inched up from 2.2 per cent in FY20 to 4.1 per cent last fiscal. With improvement in efficiency and growth in the overall economy, the profitability of corporates is expected to increase further in the coming days, said Janakiraman.
He said that besides continuity in infrastructure investment and manufacturing, the Budget is expected to use the huge dividend paid by RBI to boost mass consumption products, especially in rural regions.
Satwalekar said that given India’s strong secular growth potential, the multi-cap fund is well positioned to exploit opportunities across emerging sectors and market caps.