Tweet Thread on what just happened to Franklin Templeton Funds - Credit Risk Funds

First - Franklin Templeton today announced the winding down of SIX of its Debt Funds (which had credit risk)

This is effective tomorrow i.e. 24th April 2020

This is an unprecedented move
(1/n)

Which are these Funds?
These Funds are

Franklin Low Duration
Franklin Dynamic Accrual
Franklin Credit Risk Fund
Franklin Short Term Income
Franklin Ultra Short Bond
Franklin Income Opps Fund

All these funds have been wind down with immediate effect
(2/n)

What happens to my investments in this wind-down? They will return my money?

Ans: This wind-down is similar to a lock-down

These schemes will not allow any further transactions, no purchases, no redemptions

It's like the entire scheme becomes a segregated portfolio

(3/n)

Whoa! What do you mean? Tell me more clearly

These six schemes put together as of date have an AUM of Rs. 28,000 cr. This entire AUM is now stuck as it is. You cannot redeem

What do u mean, I cannot redeem?
Simply put, you cannot withdraw any monies

(4/n)

Cmon don't joke, my money is stuck till how long?

Ans: It's not a joke. Here;s the formal notice from Franklin Templeton

https://bit.ly/FTwind 

(5/n)

So u mean, my money is gone? They will never open these schemes

Ans: Yes, the schemes are wound down. They will never open again

It will work like a segregated portfolio i.e. the day they get any interest,, maturity from any of the holdings it will distributed to all

(6/n)

So I will get my money back soon?

Ans: As and when the underlying portfolio instruments mature or the scheme receives the money back (in case interest or defaults etc) they will pay it back to you.

So that's that simply put. Any specific Qs will be happy to answer

(7/n)