Franklin Templeton has had a presence in the country for over two decades as a trusted asset management firm. The firm established its first office in India in the year 1996. Since then, the company has expanded and now offers a varied bouquet of investment solutions to investors across the country.
Franklin India Short Term Income Plan is an open-ended, short-term debt scheme that invests in financial instruments such that the Macaulay duration of the given portfolio ranges between 1 year and 3 years. The Direct plan under this fund allows investors to directly purchase from the mutual fund house, without the involvement of distributors. Thus, investors who purchase direct plans do not have to pay distributor expenses, transaction charges, etc. This causes the NAV of a direct plan to be higher than that of a regular plan.
Investors who opt for the Growth option under this plan will not receive regular dividend payments. Instead, the amount that would have been paid as the dividend is reinvested into the scheme. Thus, while the Growth option does not provide short-term returns to investors, it is an ideal choice for those looking to generate capital appreciation.
Investment Objective of Franklin India Short Term Income Plan – Direct – Growth
By making investments in fixed income securities, Franklin India Short Term Income Plan – Direct – Growth aims to generate steady returns for investors.
Key Features of Franklin India Short Term Income Plan – Direct – Growth
Some of the key features of this scheme are as follows:
|Type of fund||Open-ended, short-term debt scheme that invests in instruments wherein the Macaulay duration of the investment portfolio ranges between 1 year and 3 years.|
|Options under each plan||
|Systematic Investment Plan||Available|
|Systematic Transfer Plan||Available|
|Systematic Withdrawal Plan||Available|
Investment Amount for Franklin India Short Term Income Plan – Direct – Growth
|Minimum application amount||Rs.5,000|
|Minimum additional investment||Rs.5,000|
|Minimum instalment for Systematic Investment Plan (SIP)||Rs.500|
|Minimum amount per transfer under the Systematic Transfer Plan (STP)||
|Minimum instalment for Systematic Withdrawal Plan (SWP)||
|Entry Load||Not applicable|
*Note: The mutual fund will close an investor’s account if the account value falls below the minimum required account balance. For this purpose, retail investors are required to maintain a minimum balance of Rs.1,000, while institutional investors are required to maintain a minimum balance of Rs.1 lakh.
Asset Allocation for Franklin India Short Term Income Plan – Direct – Growth
|Instruments||Allocations (Percentage of total assets)||Risk Profile|
|Government securities, debentures (privately placed, investment grade, etc.), and other fixed-income instruments||Up to a maximum of 100%||Medium to Low|
|Securities held under reverse repo (which includes debentures with a maturity period lesser than 1 year) and money market instruments||Up to a maximum of 100%||Low|
Who can Invest in Franklin India Short Term Income Plan – Direct – Growth
The following entities can purchase the units under this scheme:
- Minors through the parents or legal guardians
- Adult individuals who are residents of India, either on a single or joint basis (not exceeding a total of three members)
- Domestic corporate bodies, companies, and public sector undertakings that are registered in India
- Investment institutions, banks, and other financial institutions/organisations
- Religious, charitable, or any other authorised trusts
- Overseas Citizens of India (OCIs), Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs) either on a non-repatriation basis or full repatriation basis
- Hindu Undivided Families (HUFs)
- Foreign Institutional investors on a full repatriation basis and Foreign Portfolio Investors and other such entities that have the approval of the Securities and Exchange Board of India
- Co-operative societies, endowments, societies, Wakf boards, body of individuals, association of persons, and authorised clubs and trusts
- Navy, air force, army, and other similar paramilitary organisations
- Partnership firms, sole proprietorship, and Limited Liability Partnerships (LLPs)
- Industrial and scientific research organisations
- Any other bodies, associations, and institutions that are authorised to make investments in the mutual fund
- Any other institutions, bodies corporate, and individuals as decided by the asset management company from time to time
- Alternative Investment Funds and mutual fund schemes.
NAV Disclosure and Benchmark for Franklin India Short Term Income Plan – Direct – Growth
The net asset value will be computed by the asset management company on every business day and can be viewed on the official website of the AMC (www.franklintempletonindia.com). It will also be published on the AMFI website (www.amfiindia.com) by 9:00 p.m.
The net asset value is calculated using the formula given below:
NAV (In Rs. Per Unit) = Market Value of the investments of the scheme + other assets (including accrued interest) – all liabilities except reserves and unit capital/Number of outstanding units at the end of the day
With regard to liquidity offered to investors, units of the scheme can be redeemed or repurchased on all business days. The mutual fund house will dispatch the redemption proceeds to investors within a period of 10 business days from when a valid redemption request is received by the AMC.
The Benchmark Index for this scheme is Crisil Short Term Bond Fund Index.
Franklin India Short Term Income Plan – Direct – Growth Fund Manager
The fund managers who are responsible for managing the investments under this scheme, as of 27 June 2018, are Mr. Santosh Kamath and Mr. Kunal Agarwal.
Investment Restrictions of Franklin India Short Term Income Plan – Direct – Growth
A few investment regulations that are applicable to this scheme are as follows:
- The scheme might invest in other financial market investments in accordance with the guidelines issued by the RBI/SEBI/central government from time to time.
- Investment in securities from the corpus of the scheme can only by in transferable securities as per Regulation 43 of Chapter VI of SEBI (MF) Regulations, 1996.
- No investment will be made in a Fund of Funds Scheme.
- The mutual fund will not offer loans.
- The scheme will not invest over 10% of its net asset value in debt instruments, which include non-money market instruments and money market instruments, that are issued by a single issuer if they are rated not below investment grade by any credit rating agency that is authorised by the SEBI.
- The mutual fund will not make investments in – securities that are issued through private placement by a group company or associate of the sponsor, unlisted securities of any group company or associate of the sponsor, or listed securities of the sponsor’s group companies which are over 25% of the net assets.
- In the case of long-term investments, the mutual fund will have the securities transferred or purchased in the mutual fund’s name on account of the particular scheme.
*Note: The complete list of investment restrictions can be found in the Scheme Information Document.
Dividend Policy of Franklin India Short Term Income Plan – Direct – Growth
Investors may or may not receive dividends based on the option chosen under the plan, i.e., Growth or Dividend. For the Growth option, there will be no dividend distribution. The returns will be reinvested in the scheme and the growth in the net asset value be reflected as capital appreciation.
Other facilities under Franklin India Short Term Income Plan – Direct – Growth
A few facilities that are offered to investors under this scheme are as follows:
- Switch/Exchanges: Investors are given the option to switch or exchange investments from one scheme to another or one plan to another under the same scheme, provided certain conditions are met.
- Step-Up SIP Facility: Under the facility, investors who have enrolled under SIP are provided the option to increase their SIP instalment amount by a certain fixed sum.
- Pause SIP Facility: Investors who choose this facility are given the option to pause their ongoing SIP at any time during the investment tenure.
Why you should Invest in Franklin India Short Term Income Plan – Direct – Growth
Any individual who has a moderate appetite for risk and is looking to invest in short-term, fixed-income securities can invest in this scheme. Further, individuals who are looking to earn higher returns which will be reflected as capital appreciation can opt for the Growth option.
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