InvestorQ : There seems to be good news on Templeton Funds with 2 more of the 6 funds turning cash positive?
manisha Kolvenkar made post

There seems to be good news on Templeton Funds with 2 more of the 6 funds turning cash positive?

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Mahima Roy answered.
4 months ago
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Let me clarify at the very beginning that turning cash positive only means that the fund has repaid its borrowings. It has no bearing, whatsoever on the net asset value or NAV of the fund. In fact, in the last few weeks, the problem has only spread to the FOFs too.

The problem at Templeton is that little is being done to expedite the repayment of funds to the unit holders. The Templeton chief, Sanjay Sapre, is still harping on an e-vote but SEBI regulations do not require an e-vote and the fund only needs to accept it was a loss.

Now, for the cash positive part! Out of the 6 funds that were placed under freeze by Templeton in late April, 2 funds are already cash positive. With the latest repayment made by Vedanta, Franklin Credit Risk Fund and Franklin Low Duration have turned cash positive.

Again, let me reiterate that cash positive only means the fund has repaid borrowings and can start redeeming the units. But there is no clarity on when the fund will start redeeming the units and how much of haircut the unit holders of the fund will have to accept.

Even now, 2 schemes viz. Franklin Short Term and Franklin Income Opportunities have borrowings of 23% and 37% respectively. You may be aware that Templeton has also frozen fresh inflows into the Franklin Templeton FOFs, which are invested in these beleaguered funds.

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