Investors of debt funds are still shying away from making investments after the recent crisis of IL&FS affected these schemes.
The Chief Executive of the Association of Mutual Funds in India, a mutual fund lobby, N Venkatesh told Moneycontrol that debt funds may continue to see slowdown in flows when February numbers are released.
"Debt flows will see some sort of slow down in February because it is institutional flow which is coming in. They are waiting on the sidelines to see how things pan out," Venkatesh said on the sidelines of CIFA 2019.
The figures for the month of February will be released by first week of March.
As on January-end, income funds saw inflows of Rs 2,080 crore against outflow of Rs 3,407 crore in December.
The entire trouble for the fund houses started after multiple defaults by Infrastrucure Leasing and Financial Services (IL&FS), came to light a few months ago and impacted debt funds that held securities issued by it worth Rs 2,800 crore.
Venkatesh mentioned that systematic investment plans have continued to show an upward trend despite volatile markets.
"The SIPs are still showing an upward trend its not come down even in this month (February) we don’t expect it to come down," Venkatesh said.
In January, inflows through SIPs stood at Rs 8,063 as against Rs 8,022 crore in December.
Need for IFAs
Addressing at CIFA 2019, Venkatesh said mutual fund industry needs more active IFAs (Independent Financial Advisors) for the growing wealthy population.
"There are 1 lakh IFAs but only 25 percent are active. We need to look at why active IFA community is not growing," Venkatesh added.
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