Having witnessed a net outflow of Rs 52,528.07 crore in March provided it becoming a quarter finish, debt-oriented categories of mutual funds received a healthier net inflow of Rs one hundred,903. 48 crore in April. As per sector specialists, this is largely on anticipated lines as this trend is generally observed in April, which is following the finish of the economic year.
Expectedly, Liquid Funds and Overnight Funds received substantial quantity of assets. This indicates that corporates and enterprises would have selected to park their excess quick-term cash in these funds, at the starting of the new economic year.
“Besides, other funds at the shorter end of the curve (such as Money Market, Low Duration, Ultra Short Duration), too received good net positive flows during the month. This also indicates that investors continue to prefer fixed income funds at the shorter end of the curve, in line with the prevailing interest rate scenario, as well as categories with cleaner credit profiles such as Money Market and Short Duration,” stated Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, commenting on fixed earnings funds based on AMFI’s month-to-month information for April’21.
After net outflows for two months in a row, Short Duration category witnessed net inflows of Rs 1,246.52 crore in April. Similarly, Floater Funds also continued to obtain net positive flows. In April, the category garnered Rs 3,351.68 crore of net assets. The restricted probability of interest moving down substantially has benefited each these categories.
Banking & PSU funds once again witnessed net outflows this month as a outcome of the new suggestions about valuations and fund exposure norms for AT1 bonds. That stated, the quantity of net outflow fell sharply to Rs 150.91 crore in April from net outflow of Rs 6,508.32 crore in March.
“Dynamic Bond Fund category witnessed the highest net outflows of Rs 2,103.01 crore, among debt-oriented categories, during the month. This was largely because, given the current interest rate regime, investors aren’t looking for greater duration exposure,” stated Srivastava.