Franklin Templeton Mutual Fund, on Tuesday, announced the launch of an open-ended dynamic asset allocation fund called Franklin India Balanced Advantage Fund (FIBAF). This will be the first equity scheme the fund house will be launching after 2009.
The new fund offers tactical allocation between equity and debt based on market valuations and fundamental factors-driven views. The new fund offer (NFO) opens on August 16, 2022, and will close on August 30, 2022.
This fund will use a combination of quantitative and qualitative factors to determine the equity asset allocation. The quantitative parameter would be based on the month-end weighted average, Price-to-earnings (P/E) ratio and Price-to-book value (P/BV) ratio of the Nifty 500 index.
"As per the ratio bands, the corresponding equity allocation will be identified for both P/E and P/BV separately. These parameters will be accorded 50 per cent weightage each and added to arrive at the final equity allocation. We would also overlay the quantitative parameter-based equity allocation with a qualitative assessment of various factors such as macroeconomic trends, policy backdrop, aggregate corporate fundamentals, market liquidity models etc.," said K Rajasa, VP & Portfolio Manager- Franklin India Balanced Advantage Fund.
In the last two years, Franklin Templeton Mutual Fund had faced the ire of investors after it closed six debt funds in 2020. The initial announcement of the closing down scheme did create a flutter among the fund industry.
However, the fund house has managed to return money back to the investors and vindicated their stand. With the worst of crises behind, the fund house is trying to rebuild its brand and put the scars of the crises behind.
Even the newly appointed President at the fund house, Avinash Satwalekar has been travelling extensively and meeting key stakeholders like distributors, employees, investors and also investing in people and physical presence in the country to capture new growth pockets. The focus remains on re-establishing the trust that the fund house enjoyed till 2020.
"We were very successful in managing the credit side of the business. But later in 2020 crises due to the pandemic led liquidity issue our few funds face problems. We won't be looking at high yielding credit funds at this point of time. In other categories of the debt funds, we will be looking to complete our bouquet of products. On the high yields credit side, we want to solve the liquidity issue and then only we will come out with high yielding funds," said Satwalekar
The fund house is also looking at launching a few more products on the equity and debt side. However, it will stay away from high yield strategy as of now and will focus on other areas of debt funds.
Suggested read: Franklin Templeton's shut schemes have a distributable surplus of Rs 662 crore
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