How Do Franklin Mutual Fund Draw Best Returns on Debt Schemes in India?

Debt mutual funds invest in fixed income securities to deliver consistent gains to the investors at low risk. Franklin Mutual Fund provides best schemes in the debt category and the investors with low-risk appetite have enjoyed the debt schemes of Franklin MF. The AMC has provided best schemes in every major subcategory of debt mutual funds while the funds with short term maturity have been the best in India. Read to know why the debt schemes of Franklin Templeton Mutual Fund provide the highest returns to the investors.

What Makes Them Special?
The debt schemes of Franklin Templeton Mutual Fund have been applauded by many conservative investors, especially by those who are in their old age. The reason for the immense success lies with the investment strategy and the selection of fixed income securities for the portfolio. The fund managers at Franklin Mutual Fund take aggressive calls by selecting the securities with lower credit ratings and high rate sensitivity. This allows the funds to garner better returns from the securities as lower rated papers provide higher benefits but possess more risk. So far, fund managers at Franklin Templeton MF have smartly delivered better gains than other debt schemes in India as none of the high-risk securities have faced drastic outcomes and hence the funds have been generating highest returns to the investors.

What are the Best Debt Schemes of Franklin MF?

Franklin India Ultra Short Bond Fund
Franklin India Income Opportunities Fund
Franklin India Short Term Income Plan
Franklin India Low Duration Fund

Are They Risky?
The debt schemes with short term investment objective generally seek for low risk and high rated securities. However, the schemes of Franklin Templeton Mutual Fund invests a higher proportion of the corpus in securities with AAA and below ratings. For example, Franklin India Ultra Short Bond Fund has nearly 40% allocation in securities rated AAA and below while the category average for proportion in the same is less than 20%. The other high return generating debt schemes of Franklin MF have a similar difference from other schemes of the category in investment strategy. This allows them to generate better returns but these securities also bring unwanted risk to the portfolio. These funds are considered riskier than other schemes in the category although none of the investors has faced any fatal outcome or exponential loss.

Who Should Invest?
The elderly investors are much fascinated by 9 per cent annual returns which are regularly provided by most of the top performing debt mutual funds of Franklin MF. Nevertheless, these schemes might not be much suitable for the investors in old age who regularly need corpus and expect consistent gains from their investments. These funds must be chosen after consulting financial advisers as they may not be suitable to every conservative investor who seeks short term capital appreciation. The funds involve higher risk as the securities in the portfolio have a higher probability of defaulting although none of the securities has defaulted yet.

Conclusion
Franklin Mutual Fund has launched many of the best debt mutual funds in India. The security selection and investment strategy of the fund managers have allowed the investors to enjoy the highest returns in category for a long time. These funds draw out higher returns by investing low rated securities with higher rate sensitivity. The risk in such schemes is higher than other debt mutual funds in India. The aim of short term debt funds is to avoid volatility and risky papers. Debt funds must not be chosen only for high returns as the objective is the deliver consistent low-risk gains. The recent defaulting of IL&FS and DHFL have hit the debt market hard but no bad news has yet arrived for the investors in Franklin Mutual Funds. If you want to invest in these schemes, you must be aware of the risk they possess. Besides who doesn’t enjoy earning better returns on their hard earned money?

Read the article to know how debt schemes of Franklin Templeton Mutual Fund deliver highest gains to the investors.