Debt MF outflows at Rs 1 lakh cr in September
Withdrawal was Rs25,873cr in Aug
Investor sentiment towards debt investments was largely muted. Barring long duration and gilt fund segments, all the other 14 categories witnessed net outflows
Focus Shifting
♦ Advance tax rush infused withdrawal of Debt MF
♦ Correction in equity mkts further increased pressure
♦ Mostly corporate pull out investments
♦ AUM of debt funds fell to Rs13.05 lakh cr in Sept from Rs14 lakh cr in Aug
New Delhi: Debt-oriented mutual fund (MF) schemes witnessed a net withdrawal of Rs1.01 lakh crore in September, making it the second consecutive month of the outflow, primarily due to advance tax requirements of corporates and correction in equity markets.
The segment saw an outflow of Rs25,873 crore in August. Before this, the debt schemes attracted Rs61,440 crore in July, data from the Association of Mutual Funds in India (Amfi) showed. The huge outflow has pulled down the assets under management (AUM) of fixed income funds or debt funds to Rs13.05 lakh crore at the end of September from Rs14 lakh crore in the preceding month-end.
Investor sentiment towards debt investments was largely muted. Barring long duration and gilt fund segments, all the other 14 categories witnessed net outflows. These two categories have been finding favour with investors for some time in anticipation of a change in the interest rate cycle.
“Advance tax payments and other quarter-ending accounting and financial necessities resulted in an outflow in the debt category in September,” said Gopal Kavalireddi, vice-president (research) at FYERS.
The huge net outflow in September could be attributed to the advance tax requirement that corporates need to meet with it being quarter end, said Melvyn Santarita, analyst (research) at Morningstar India.
Moreover, some correction in the equity markets towards the later part of September could also have prompted investors to shift towards equity with the expectation of better returns, he added. In terms of categories, expectedly liquid funds saw the highest net outflows of Rs74,176 crore during the month, followed by money market funds (Rs9,158 crore), ultra-short duration funds (Rs5,168 crore) and floater funds (Rs4,903 crore). Further, corporate bond funds as a category witnessed net outflows of Rs2,459 crore after witnessing regular net inflows since January.
