Liquid funds, which are used by banks and corporates to park surplus cash, recorded the highest amount of outflows last month
The 44-player mutual fund industry witnessed net outflows of Rs 1.51 lakh crore in September on the back of a large outgo from liquid, money market and ultra-short duration funds.
Liquid funds, which are used by banks and corporates to park surplus cash, recorded the highest amount of outflows last month. The category registered an outflow of Rs 1.41 lakh crore as against an inflow of Rs 79,000 crore in August, data from Association of Mutual Funds in India (AMFI) shows.
“Outflows in liquid funds are because of a quarter-end phenomenon as companies and banks withdraw their liquid fund investments to pay quarterly advance tax and for capital adequacy,” said NS.Venkatesh, Chief Executive, AMFI.
Corporates normally park their money in liquid schemes to meet their short-term needs instead of leaving their funds idling in bank current accounts. Normally, companies rush to redeem their investments from cash plans every quarter to meet advance tax payment commitments.
Companies pay advance tax in four instalments of 15 percent, 30 percent, 30 percent, and 25 percent on June 15, September 15, December 15, and March 15, respectively.
The second highest outflow in the income and debt category was recorded by ultra short duration funds, which recorded Rs 6,784 crore worth of outflows compared to an inflow of Rs 2,829 crore in August.
Credit risk funds too continued to suffer on the back of credit defaults and downgrades, recording outflows of Rs 2,352 crore in September (versus an outflow of Rs 2,270 crore in August).
Total net inflows into equity funds stood at Rs 6,609 crore in September (vs inflows of Rs 9,152 crore in August).
SIP inflows continued to be at Rs 8,262 crore for September as against Rs 8,230 crore
Overall the MF industry AUM stood at Rs 24.5 lakh crore. Of this, the retail AUM was Rs 11,23,779 crore.