Debt MF inflows improve in May

Fears of redemptions particularly from debt mutual fund schemes receded with healthy inflows in all most all categories in May with overall mutual fund industry assets up by 2.5 per cent or Rs 63,000 crore to Rs 24.54 lakh crore, monthly data released by Association of Mutual Funds in India (Amfi) showed. Debt funds received combined inflows of Rs 63,665.54 crore in May with bulk of it coming in Liquid Funds (Rs

61,870.87 crore), Banking and PSU Funds (Rs 8,873.35 crore) and Money Market Funds (Rs

5,010.47 crore).

Still there was withdrawal from select debt fund categories like Overnight Funds (Rs 15,880.91 crore), Credit Risk Funds (Rs

5,173 crore) and Medium Duration Fund (Rs 1,519.72 crore).

In April, Credit Risk Fund had seen withdrawal of Rs 19,238.98 crore but has now moderated as reflected in May data above.

“The month of May has been instrumental for debt funds in terms of an increase in AUM. In May

2020, Debt Funds saw a net inflow of Rs 63,665.54 crore, up from Rs 43,431.55 crore in April 2020. This is an indicator of returning investor interest and confidence in debt funds. The RBI intervention for the debt market has helped in returning stability in debt funds. However, credit risk funds continue to see the fall in the net AUM,” said Amit Singh, head, Investica, an online platform to invest in mutual funds.

“Overall, debt mutual funds have seen a significant recovery in May 2020 and we will continue to see this trend in the coming months as the stability returns in debt markets,” Singh said.

Inflows were moderate in Equity Funds at Rs 5,256 crore but almost doubled in the Hybrid Funds category at Rs 8,652 crore.