Liquid funds back onto India investors’ menu as IL&FS pain fades
Investors poured a net Rs 1.4 trillion into liquid plans in November, the highest since August
Mumbai: Flows to India’s money funds hit a three-month high in November as calm returned to the credit market recently roiled by a rare debt default.
Investors poured a net Rs 1.4 trillion ($20 billion) into liquid plans in November, industry data show. The inflow is the highest since August, a month before the funds suffered the worst outflows since at least 2007 amid defaults at the IL&FS Group.
“Worries after that credit event are abating and people are returning to money markets,” N.S. Venkatesh, chief executive officer at the Association of Mutual Funds in India, said in a conference call on Friday.
Defaults at IL&FS were a reminder that liquid funds, which account for a fourth of the Rs 23 trillion of industry assets, are also fraught with risk. Several fund houses marked down their holdings of debt issued by IL&FS, with some liquid funds losing as much as 5%, or half a year’s worth of gains, in a single day.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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