Franklin Templeton Fixed Tenure Fund (FTFTF) - Series X: Finance Trading Times

Franklin Templeton Fixed Tenure Fund (FTFTF) - Series X

There is a new FMP or Fixed Maturity Plan in the offering from the Franklin Templeton Mutual Fund house. It claims to be a combination of debt and equity and if offering 2 plans (A & C) through which the investors can invest their money.
Franklin Templeton Fixed Tenure Fund FTFTF
What is the Franklin Templeton Fixed Tenure Fund (FTFTF) all about?
The Franklin Templeton Fixed Tenure Fund (FTFTF) is a closed ended income fund which will allocate the investor’s money into different instruments (both debt and equity, but major focus will be primarily on debt instruments). This fund thereby will attempt to gain on both fronts –offering steady returns through interest earned on fixed income securities and aiming to achieve capital gains by investing in equities.

How will the money be invested in Franklin Templeton Fixed Tenure Fund (FTFTF)?
There will be two investment plans:

Plan A: Debt securities (including securitised debt) and Money market instruments: 80%-100%, Equities and Equity-linked instruments: 0%-20% (investments in ADR/GDR/foreign securities up to 40% of the equity/ debt portion; exposure in derivatives up to a maximum of 50%)

Plan C: Debt securities (including securitised debt) and Money market instruments: 70%-100%, Equities and Equity-linked instruments: 0%-30% (investments in ADR/GDR/foreign securities up to 40% of the equity/ debt portion; exposure in derivatives up to a maximum of 50%).

So investors who have more affinity for equity can opt for plan C which will get them marginally more exposure in the equities side. Others who want to have more investments in bond and fixed income securities can opt for Plan A.

What is the load structure: Entry load and Exist load in Franklin Templeton Fixed Tenure Fund (FTFTF)?
Entry Load for Franklin Templeton Fixed Tenure Fund (FTFTF): Nil or Zero.

Exit Load Franklin Templeton Fixed Tenure Fund (FTFTF):
Plan A - Up to 2.5% on redemption/repurchase/switch-out, based on the period of holding;
Plan C - Up to 3% on redemption/repurchase/switch-out, based on the period of holding.

The exit load cost is really high. Compare this to any equity based mutual fund which only charges 2.25% of entry load and no exit load may sound a better investment, if looking from point of view of cost of investment. However, one should also keep in mind the time value of money, as here the charges would be levied on exit, while in mutual fund investments, they are levied on entry.

What is the New Fund Unit Price of Franklin Templeton Fixed Tenure Fund (FTFTF)?
Each unit of Franklin Templeton Fixed Tenure Fund (FTFTF) during the NFO period would be offered at the rate of Rs. 10 per unit.
Since it is a close ended scheme, only a limited number of units will be sold in case of over-subscription.

Any tax benefit available through investment in Franklin Templeton Fixed Tenure Fund (FTFTF)?
There is no tax benefit available in Franklin Templeton Fixed Tenure Fund (FTFTF).

What are the NFO dates for Franklin Templeton Fixed Tenure Fund (FTFTF)?
The NFO period for Franklin Templeton Fixed Tenure Fund (FTFTF) is currently open and will close on 31st July 2008. Table of Contents
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