Mutual funds focused on investing in fixed-income securities witnessed a heavy outflow of Rs 92,248 crore in June on uncertain macro environment, driven by expectations around an increasing rate cycle, higher commodity prices and slowdown in growth.
This comes following a net outflow of Rs 32,722 crore in May and an inflow of Rs 54,756 crore in April, data available with Association of Mutual Funds in India (Amfi) showed.
Out of the 16 fixed-income or debt fund categories, 14 witnessed net outflows during the month under review. The heavy withdrawal was seen from segments, such as overnight, liquid and ultrashort-term duration funds. The only categories that witnessed inflows were the 10-year gilt funds and the long duration funds.
One of the reasons for the net outflow could be a sign of investors’ short-term money requirements due to the current market scenario of rising repo rates and inflation rates, Priti Rathi Gupta, Founder, LXME India’s first financial platform for women, said.