Debt โคMutual Funds Witness โขRs 8,000 Crore Outflow in August, Driven by Liquidโ & Gilt Fund Redemptions
Mumbai: Debt mutual funds experienced a net outflow of approximatelyโข Rs 8,000 crore in August, reversing recent positive trends, according to data โanalyzed from fund flows and industryโข reports. While overall investor interest inโค debt funds remains positive for teh year-to-date, outflows โfromโ liquid and โgilt funds were key drivers of the August decline.
Liquidโ funds led โthe redemptions with a ample outflow ofโ Rs 13,350 crore,โ followed by gilt funds which saw Rs 928 croreโฃ withdrawn during the month. This contrasted sharply โwith inflows intoโ overnight and money marketโ funds, which received Rs 4,950 crore and Rs 2,210 crore respectively.medium-duration funds experienced theโ lowest positive inflow at just rs 111 crore.
The โขoutflows contributed to a marginal decline in the Assets Underโข Management (AUM) of open-ended debt funds, fallingโค 0.2% month-on-month toโค Rs 18.71โฃ lakh crore in Augustโ from Rs 18.76 lakh crore in July, as reported by the โAssociation of โMutual Funds in India (AMFI).
Despite the August pullback,โค debt funds have collectively attracted a total inflowโ ofโข Rs 2.19 โฃlakh โขcroreโ in the current calendar year and Rs 3 lakh croreโ in the current financial year.
Analysts โขnote a continuedโข preference for shorter-duration โdebt strategies. โข”Short duration, Low Duration, and โUltra Short Duration โฃfunds collectivelyโ attracted nearly Rs 1,416 crore, signaling a steady preference for low-volatility accrual โstrategies,” saeidโค nehal, an expert followingโค the market. She added that investors likely booked profits andโ shifted focus โto more liquid, shorter-tenor options, resulting inโข combined outflows of approximately Rs โค1,625 crore from Corporate โBondโ fundsโ and Banking & PSU Funds.
The appealโ of overnight funds โฃas a “safe and instantly accessible investment option” continued to drive โinflows, while money market fundsโฃ saw aโข moderation in additions following record inflows in july.