Templeton Floating Rate Income Fund - Short Term

Nature of the Scheme:An open-ended income scheme investing normally 0-35% in fixed rate debt instrument and 65-100% in floating rate debt instrument for shorter investors with investment horizons between one to six months.

About the fund: Launched for the first time in India, a floating rate debt instrument is different from a fixed rate debt instrument in the manner in which the interest rate is set. In case of fixed rate instruments, as the name ‘fixed’ suggests, the rate of interest to be paid is fixed and predetermined. Whereas in a floating rate debt instrument, the interest rate is reset periodically based on the prevailing market interest rates. If the interest rates go up, the interest payments in case of a floating rate will be set (through the periodic reset) at a higher level.