If you did not already know, I had a bunch of investments in Franklin Ultra Short Term Fund. At one point, I had as much as 50% of my fixed income invested in it. However, my asset allocation being almost 80% in fixed income at that time, my exposure to this specific debt fund was almost 40%. Now imagine how it would feel like to know that Franklin has decided to wind-up the fund? I was not worried that I will lose the money, but the problem is that most of my investments are now illiquid. The whole point of investing in mutual funds was for the liquidity.
Of course I made some corrections to avoid such bad situations in future, but the future never repeats. There will be a different kind of issue. Anyway, the good news is that after a bit more than 2 years Franklin has finally returned all my investments with interest. Luckily this investment did not turn out to be a bad one. Out of the 6 mutual funds that were under winding up, 4 of them returned the investment in full. Investors in the other 2 funds will have to wait a bit longer I guess, but even in that case, most of the investment is already returned and only a small amount is still left with the fund house.
While one problem has been checked off, I have to contend with unexpected taxes one more time. I did not plan to sell and reinvest any of my debt investments, but thanks to Franklin, they sold it for me. Now in addition to thinking about where to invest (aka reinvestment risk), I have to calculate my taxes once again and pay any advance tax that is due. Anyway, that is the end of the Franklin saga that dragged on. I did not have anything else to report about it in the post. Just wanted to bring it to a closure in case anyone is wondering.
The silver lining to this whole ordeal is that I made a good 8% return on my investment even as the rest of the debt mutual funds have been giving abysmal returns in the past couple of years, thanks to RBI actions.