Open-ended debt funds record highest on-year net outflows

The open-ended debt fund category saw net outflows of ~Rs 52,528 crore this March, the highest net outflow seen since ~Rs 1.95 lakh crore in March 2020. Money market fund categories bore the brunt of the outflow in the month as corporates and institutional investors redeemed their investments for paying taxes. Within the category, liquid funds witnessed the highest outflows of ~Rs 19,384 crore, followed by low duration funds’ Rs 15,847 crore.

On the other hand, overnight funds, which invest in underlying securities that mature in a single day, attracted the highest net inflows of ~Rs 5,027 crore. Floater funds also evinced investor interest, and net inflows amounted to Rs 3,229 crore in March.

In fiscal 2021, corporate bond funds, which invest in an underlying portfolio of top-rated papers, emerged as the biggest attraction in the category – net inflows over the 12 months ended March 2021 were Rs 69,305 crore. Credit risk funds saw the highest net outflows, at ~Rs 28,923 crore, over the same period.

At an aggregate level, open-ended debt funds’ AUM ended 3.36% lower on-month at Rs 13.28 lakh crore. In fiscal 2021, the category’s AUM advanced ~29% or by Rs 2.99 lakh crore primarily aided by net inflows of ~Rs 2.30 lakh crore during the period.