Liquid funds outflow exceeds Rs 1.5 trillion in March, shows data | Mutual Fund – Top Stories

Liquid mutual fund outflow in March stands at Rs 157,970.38 crore, as per Amfi data. This is the sharpest reversal in trend from the February data, when investors poured in Rs 83,642.33 crore in the liquid mutual funds.

Liquid mutual funds invest money in debt instruments like government securities, commercial papers and treasury bills that mature in 91 days. Hence, these instruments are less prone to risks associated with interest rate change.

In terms of debt-oriented schemes, the whole segment took a beating as investors took out Rs 1,98,298.90 crore in total, contrary to the Rs 63,808 crore inflow in February 2024. Long Duration Fund and Gilt Fund with 10-year constant duration, were the only exception in the debt mutual fund category, with 772.29 crore and Rs 58 crore inflow respectively.

Equity mutual funds

The equity mutual fund also showed a sharp reversal trend in the smallcap segment. Investors took out Rs 94 crore in March, while February inflow stood at Rs 2,922.45 crore. The inflow in the index fund stood at Rs 1,822.41 crore, registering a decline of 28 per cent from the February inflow when it stood at Rs 2,536.37 crore. “Owing to the large valuation gap, smart investors initiated a portfolio rebalancing in January and continued the shift over the last two months”, said Gopal Kavalireddi, vice-president, research, FYERS.

However, investors continued to remain positive on the large and midcap segment. They invested Rs 3,215.58 crore in March, up 1.8 per cent from the February inflow. “’Open ended equity fund schemes garnered Rs 22,633 crore, continuing the third month of netflows greater than Rs 20,000 crore but 16 per cent down from February. Sectoral or thematic funds saw the highest flows at Rs 7,918 crore, followed by Rs 2,738 crore into flexi cap funds,” Kavalireddi said.

Hybrid & NFOs decline

Hybrid funds also saw a sharp decline with Rs 5,583.62 crore inflow, down by 69.15 per cent from the February inflow. “With strong moves in commodities, real estate and equity markets, investors continue to opt for multi-asset allocation funds, pouring in Rs 2,681 crore in March. The asset under management of the hybrid schemes category was at Rs 7.22 trillion”, Kavalireddi added.

“New fund offerings (NFOs) were also on the downtrend, mobilising only Rs 4,146 crore from 21 schemes. Five sectoral/ thematic funds launched by asset management companies line Baroda BNP Paribas, Canara Robeco, Edelweiss, Kotak and Union, collected Rs 3,074 crore. Systematic Investment Plan (SIP) monthly inflow was at Rs 19,270 crore, continuing the strong inflow exhibited since the beginning of FY24. Total SIP contribution stood at Rs 1.99 trillion, an uptick of 27.7 per cent over the previous year”, Kavalireddi said.

First Published: Apr 10 2024 | 6:37 PM IST