Fixed-income (debt) mutual funds witnessed a strong recovery in the month of October. There was a net investment of Rs 1.6 lakh crore in debt funds during this period, while there was a huge withdrawal of Rs 1.02 lakh crore from this category in September. According to PTI news, the main basis of this growth was the strong inflow in liquid and overnight funds. According to Amfi (Association of Mutual Funds in India), due to this inflow, the AUM of debt-oriented mutual funds increased by about 10% to Rs 19.51 lakh crore, from Rs 17.8 lakh crore in September.
Which direction will the investment trend in the future?
According to the news, Nehal Meshram, Senior Analyst, Morningstar Investment Research India, says that in the coming times, most of the investment flow may remain concentrated in liquid, money market and high-quality accrual funds. Investors are currently waiting for clarity on the timing and pace of possible interest rate cuts, due to which they are avoiding increasing exposure to long-term bond funds.
Monthly Performance: Inflow-Outflow Trend
October: +1.6 lakh crore rupees
September: Rs 1.02 lakh crore
August: Rs 7,980 crore
July: +1.07 lakh crore rupees
According to Nehal Meshram, the rally in October was driven by reinvestment of institutional capital pulled out at quarter end, which came back sharply into liquid and overnight funds.
Inflow in 10 out of 16 debt categories
liquid funds
Inflow: Rs 89,375 crore
September outflow: Rs 66,042 crore
overnight funds
Inflow: Rs 24,051 crore
money market funds
Inflow: Rs 17,916 crore
Reinvestment of institutional cash in short-term instruments
other categories
Strong recovery in ultra-short and low-duration funds
Corporate bond funds: Steady inflows of Rs 5,121 crore
underperforming category
Credit risk funds: Investors remain cautious
Dynamic Bond Funds: Marginal outflow of Rs 232 crore
Gilt funds: Outflow of Rs 931 crore
Impact of long-term yield fluctuations
condition of equity funds
Equity mutual funds recorded inflows of Rs 24,690 crore in October, down 9% compared to Rs 30,421 crore in September.
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