Investors continued to withdraw from mutual funds focused on investing in fixed-income securities for third consecutive quarter and pulled out over Rs 70,000 crore in April-June due to high inflation and an increasing rate cycle.
“In the next (September) quarter, it is safe to assume that monetary conditions will be tighter in terms of lower amount system liquidity and higher regulatory rates, both of which should see further reduction in mutual fund debt corpuses,” Sandeep Bagla, CEO Trust Mutual Fund, said.
Interest rate will be the major factor to dictate flow in debt mutual funds in coming quarters. Once rates start stabilizing, inflows can be expected, Ankit Yadav, Wealth Manager (USA) & Director of Market Maestroo, said.
The latest outflow has pulled down the asset managed by fund managers for debt fixed-income funds by 5 per cent to Rs 12.35 lakh crore at June-end from close to Rs 13 lakh crore at the end of March, data available with the Association of Mutual Funds in India (Amfi) showed.
After hitting a peak of Rs 14.16 lakh crore in the first quarter of fiscal 2022, assets under management for the fixed-income category has been on a steady decline and since then the asset base has fallen by 13 per cent.
According to the data, net outflow from open ended fixed- income mutual funds or debt mutual funds was at Rs 70,213…
