Massive liquid fund outflow takes away 2% of MF assets

NEW DELHI: The mutual fund industry, which has just started declaring data for segregated portfolios, began the new year on a losing note with the overall AUM falling around 2% in January, hit by surprise net outflows of a whopping Rs 45,316 crore from liquid funds, a report said.

Other reasons for the fall in overall assets include liquidity tightening measures by the central bank in the month with two special repo auctions, continuing outflows from equity-oriented schemes and the mark-to-market losses in the underlying market assets, Crisil said in a note on Wednesday.

All this had the aggregate assets under management (AUM) dwindling by Rs 52,345 crore or 1.7% to Rs 30.50 lakh crore in January from the record high of over Rs 31 lakh crore in December, according to Amfi data, that excludes the domestic fund of funds, collated by Crisil.

While all the above-cited reasons led to the fall, the pressure on short-term yields pushed money out of short-term debt categories, leading to the net outflows, the agency said.

Liquidity-normalising measures by the Reserve Bank in the first and third week of January in the form of special reverse repo auctions also exerted pressure on short-term yields, resulting in money being removed from openended short-term debt categories, it added.

Liquid funds bled the most with net outflows at Rs 45,316 crore, reversing the net inflow of Rs 5,102 crore in December.