Where to invest your Franklin debt fund proceeds?

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You would have started getting the locked money from 5 of the 6 debt schemes of Franklin India Mutual after a stressful 10 months. Now that the money has started flowing in, where should you invest?

After all the hassle, you would likely not be in a mood to park it in any risky asset – for a while at least. So, FDs may be your natural choice and rightly so.

All FD investment

Where capital preservation scores over everything else, do not scout for options. Simply opt for bank FDs of large banks. But broadly, at this juncture, locking into FDs would mean entering at very low rates. So, if you do enter FDs, remember to enter for shorter periods of 6 months to 1 year and lock in later for longer periods when rates go up. You could go with your bank or check other FD options in our deposits section.

If your amount is large and you wish to build a portfolio, then consider using the options below. Some of them will have debt funds that you can opt for or choose to ignore.

#1 Income need

If you are a senior citizen and in need of income, it is best to stick to traditional options. Please check our retire income portfolio that has a mix of FDs and govt. schemes. https://primeinvestor.in/portfolio-life-situation-retiree/

For others (not senior citizens) who depend on income from your corpus please check our income portfolio https://primeinvestor.in/portfolios-need-based/ but make sure you have some liquidity by parking in short-term FDs.

#2 Liquidity need

If liquidity is a priority for you, then lock some amount into short-term FDs of 3-6 months and the rest in highly liquid and low risk debt funds. Our emergency portfolio will fit this bill.  https://primeinvestor.in/portfolios-need-based/

#3 Asset allocation need

If your Franklin proceeds were used as part of an asset allocated portfolio, and you still have faith in debt funds, then you can consider low risk funds. Check out our very short and short and medium duration funds listed in Prime Funds. These categories will readjust to the higher rate scenario (there will be some volatility for few months) and will settle to benefit from higher coupon in the new instruments they will add over time. Choose the category appropriate to your time frame.

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