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Open Ended Debt Mutual Funds See 42% Fall In Net Inflows

Joan Mathews Joan Mathews 09 July 2019

Open-ended debt schemes have seen a 42% month-on-month decline in net inflows during May, according to data published by the AMFI. The debt mutual fund space has been recently hit by a series of defaults and downgrades, various news reports have suggested.

Open Ended Debt Mutual Funds

As per data released by the Association of Mutual Funds in India (AMFI), open-ended income or debt-oriented schemes saw a 42% month-on-month decline in net inflows, according to The Economic Times. The net inflows for May 2019 totalled Rs 70,119 crores, as compared to Rs 1,20,920 crores in April 2019. The drop highlights investors' lack of confidence in debt schemes after the recent defaults and downgrades that have hit the debt mutual fund space.

Most of the debt mutual fund categories, including low duration funds, medium duration funds, medium to long duration funds and credit risk funds, among others, have witnessed net outflows during May, the Indian daily newspaper has reported. Fixed Maturity Plans saw a net outflow of Rs 1,797 crores in May, as compared to Rs 17,644 crores in the earlier month, shows AMFI data.

Flows in equity mutual funds, on the other hand, witnessed a spurt of 17.33% to Rs. 5407 crores in May, as against Rs 4608.74 crores in April, according to a report by Business Standard, citing AMFI. Inflows in SIPs dropped marginally from Rs 8,238 crores in April to Rs 8,183 crores in May, it further stated. Overall, the net inflows in open ended schemes amounted to Rs. 70,119 crores.

AMFI CEO N S Venkatesh has been quoted as saying “The retail fund flows would now further strengthen on the back of political stability, promise of further economic reforms and improving macro-economic environment coupled with healthy corporate earnings growth," Indian financial daily Mint reported. Meanwhile, the AMFI has been following a new format to release data (as made mandatory by SEBI) since April. The format requires scheme categorization into different segments - open-ended, close-ended and equity-oriented schemes.

Joan Mathews
Written by Joan Mathews
Joan has over 4 years of experience writing for the BFSI industry. She enjoys watching mystery TV series, listening to 80s classics and spending time with her furbabies.