Mutual funds see net outflow of over Rs25,000 crore in June
At the end of June, AUMs for liquid and money market funds stood at `2.07 trillion
Mumbai: Mutual funds saw a net outflow of more than ₹ 25,000 crore in June owing to huge redemptions in liquid and money market funds, data from Association of Mutual Funds of India (AMFI) showed.
Despite strong inflows in income, growth and balanced funds, mutual funds were hit by net outflows of ₹ 25,085 crore due to net outflows of ₹ 47,330 crore from liquid and money market funds. These outflows are generally very high in March, during the fiscal year end.
Liquid and money market funds invest mainly in money market instruments like treasury bills, commercial papers, certificate of deposits, and term deposits. They have a lower maturity period, and have no entry or exit load. These funds also do not have any lock-in period.
At the end of June, assets under management (AUMs) for liquid and money market funds stood at ₹ 2.07 trillion, and was 17.6% of the total AUMs of all schemes that totaled ₹ 11,73,294 crore.
“Largely, it’s the quarter-end kind of phenomena. It is on anticipated lines. Banks and corporates usually exit around this time," said Lakshmi Iyer, chief investment officer (debt) and head products at Kotak Mutual Fund.
“It is the usual known phenomena at the end of every quarter," added Iyer. There were outflows in every quarter end since at least December 2011.
Apart from liquid and money market funds, gilt funds and funds of funds that invest overseas, saw redemptions of ₹ 279 crore and ₹ 26 crore, respectively in the month of June. In the same period, growth, balanced and income funds had inflows of ₹ 11,999 crore, ₹ 4,419 crore, and ₹ 5,861 crore, respectively.
For the quarter, however, the mutual funds saw net inflows to the tune of ₹ 85,727 crore.
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