InvestorQ : Who bears the losses in the Templeton fiasco on the debt funds front?
Debbie Mascarenhas made post

Who bears the losses in the Templeton fiasco on the debt funds front?

Answer
user profile image
Crowny Pinto answered.
4 months ago


Clearly, the investors in the debt fund are being left with limited options. Firstly, fund managers bought bonds in which no prudent investor would ever put money. Secondly, they never disclosed the burgeoning risks in these investments. Thirdly, the unit holders have limited choice. If they don’t approve winding up resolution, they get nothing. They have been asked to vote for dissolution of the 6 funds, without the faintest idea of what they would realize. It could be as low as 25% but it could even be worse. What investors were not prepared for is taking huge capital losses just because some over-agile fund manager chooses to shoot from the hip. The regulator has to set a precedent and disgorge losses. Let it be a clear precedent for the future. At least, the investors should not be asked to bear the loss of some other expenses!