Franklin Templeton Mutual Fund on Thursday announced the closure of its six credit funds due to liquidity issues amid the coronavirus crisis.
The funds that will be shut are Franklin India Low Duration Fund, Ultra Short Bond Fund, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual Fund, Income Opportunities Fund, the company said in a statement.
As of April 22, total asset under management by these funds was Rs 25,856 crore.
"There has been a dramatic and sustained fall in liquidity in certain segments of the corporate bonds market on account of the COVID-19 crisis and the resultant lock-down of the Indian economy which was necessary to address the same," it said.
The fund house further said that mutual funds, especially in the fixed income segment, are facing continuous and heightened redemptions.
The trustee or the people authorized will continue to realize or dispose-off the assets of the schemes. The sale proceeds after the discharge of all liabilities and expenses will be paid to the unitholders in proportion to their respective interests in the assets of schemes.
The statement noted that the Trustees of Franklin Templeton Mutual Fund in India, after careful analysis are of "the considered opinion that an event has occurred, which requires these schemes to be wound up and that this is the only viable option to preserve value for unitholders and to enable an orderly and equitable exit for all investors in these unprecedented circumstances".
It said that individual emails are being dispatched to the unitholders regarding the closure of the schemes.
(With inputs from IANS)