Debt MFs clock Rs 1.2-trn outflow in Q4

New Delhi: Mutual funds (MFs) focused on investing in fixed-income securities saw an outflow of Rs1.2 crore in the March 2022 quarter on massive withdrawal from segments, such as liquid, short duration, and corporate bond funds, a report by Morningstar India said on Monday.

This has taken the net outflow from the category to Rs68,471 crore in 2021-22 compared to the net inflow of Rs2.3 lakh crore in the preceding financial year. The debt MF category had registered an infusion of Rs 21,277 crore in the December 2021 quarter. Out of the 16 fixed-income or debt fund categories, 15 witnessed net outflows during the quarter ended March 2022.

Only the overnight fund segment saw a fund infusion of Rs 7,802 crore during the quarter under review. According to the report, debt funds saw net outflows to the tune of Rs1.15 lakh crore in March, and Rs 8,274 crore in February, whereas January saw net inflows of Rs 5,087 crore. "Typically, the last quarter of a fiscal year always has net outflows in the open-end fixed-income category as a lot of funds get withdrawn by institutional investors from categories like liquid, ultra short term, money market, and so on for payment of taxes," Morningstar India said.

The outflow has pulled the asset base of debt mutual funds to Rs 13 lakh crore by March-end 2022 from Rs 14.05 lakh crore at the end of the preceding quarter. The liquid, ultrashort-term, money market and overnight fund categories constitute a substantial portion of the total assets (about 50 per cent) within the debt fund category.