Franklin Templeton has come out with a capital protection fund called Franklin Templeton Capital Safety Fund.
The focus of this fund is to provide for protection of capital while giving investors the opportunity to benefit from the return potential of equities.
Being a typical close-ended fund, the fund will not repurchase units of the scheme before the end of the maturity period. So in an attempt to offer some exit option, the fund is in talks with NSE to get it listed.
There are two options where tenure is concerned, a three-year and a five-year plan. Both come with the option of growth and dividend plans.
Where the three-year option is concerned, the equity portion will be limited to 0 to 20 per cent while the rest will be in debt. Where the five-year option is concerned, the equity portion will be slightly higher at 0 to 30 per cent. Depending on the state of the market, the fund managers will take a call on the equity-debt allocation but will stick to the limits stated.
Where the debt portion is concerned, the investments will be restricted to high quality debt securities (AAA and above) with matching maturities to minimise credit and interest rate risk.
The equity portion will be managed just like a diversified equity fund with no particular preference for large-caps or small-caps. It will more like a flexi-cap style.
The fund has been rated AAA (so) by CRISIL, indicating highest degree of certainty regarding payment of initial investment to unit holders.
Snapshot
Offer opens: October 31, 2006
Offer closes: November 30, 2006
Entry load: Nil
Exit load: Nil
Minimum investment: Rs 10,000
Type of fund: Close-ended
Scheme options: Growth / Annual dividend along with reinvestment and payout options
Tenure: 3-years and 5-years
Benchmark: Crisil MIP Blended Index
Fund managers: Santosh Kamath (debt) and Satish Ramanathan (equity)
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