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MF industry sees large outflows from debt funds in June

Informist, Friday, Jul 8, 2022

 

By Kshipra Petkar

 

MUMBAI – The mutual fund industry reported net outflows of 698.5 bln rupees in June, mainly on account of heavy outflows from most debt funds.

 

Data released by the Association of Mutual Funds in India today showed that assets under management of the industry fell by 4% on month to 35.6 trln rupees as on Jun 30.

 

Open-ended debt funds witnessed net outflows to the tune of 922.5 bln rupees, compared to 327.22 bln rupees net outflows in May.

 

Categories such as liquid and overnight funds saw major outflows mainly because corporates redeemed investments for their quarter-end fund requirements.

 

“On the negative flows in debt schemes, quarter-end phenomenon is playing out where corporates redeem their debt investments for advance tax payments and banks wanting to avoid capital charge enforced by Reserve Bank of India,” AMFI Chief Executive N.S. Venkatesh said.

 

Among specific categories of open-ended debt funds, liquid funds saw net outflows of 157.83 bln rupees in June and overnight funds saw net outflows of 206.68 bln rupees.

 

Other categories such as duration funds also saw outflows due to volatility in the debt market.

 

EQUITY ASSETS

The mutual fund industry saw a marginal decline in net inflows into open-ended equity funds during the month. Data showed that net inflows into equity funds stood at 155 bln rupees in June, lower than 185.3 bln rupees in May.

 

All categories witnessed net inflows during the month, with flexi-cap equity category seeing the highest net inflows of 25.12 bln rupees, followed by large-cap, and large- and mid-cap funds at 21.3 bln rupees and 19.95 bln rupees, respectively.

 

“This gives an indication that essentially retail investors continue to repose faith in the equity markets,” Venkatesh said.

 

However, assets of equity funds declined by 3.4% on month to 12.9 trln rupees as on Jun 30, largely due to fall in equity markets. In June, the Nifty 50 index had declined by nearly 5%.

 

Net inflows through systematic investment plan route were marginally down at 122.76 bln rupees in June from 122.86 bln rupees in May. Assets of systematic investment book came in at 5.51 trln rupees at the end of June, compared to 5.66 trln rupees a month ago.

Open-ended hybrid funds saw net outflows at 22.8 bln rupees in June, and the assets under management fell 2.5% on month to 4.7 trln rupees as on Jun 30. The arbitrage fund showing a net outflow of 55.93 bln rupees in June contributed to the outflow.

 

Index funds and other-than-gold exchange-traded funds saw net inflows of 73.01 bln rupees and 53.59 bln rupees, respectively.  End

 

Edited by Aditya Sakorkar

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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Source: Cogencis

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