MUMBAI: Risk aversion and investor preference towards safer debt options on the back of several NBFCs defaulting on payouts to mutual funds have seen outflows in the riskier fund category and inflows into the banking and PSU funds instead.
Credit risk funds that took the impact of rating downgrades in corporate debt paper saw net outflows rise to Rs 4,155 crore in May, compared to a net outflow of Rs 1,253 crore in April. On the other hand, the banking and PSU funds saw net inflows increase to Rs 3,381 crore in May from Rs 2,792 crore in April.
“Credit funds and investors will definitely reassess the situation, evaluate their opportunities. On gilt and other high-quality income funds, more inflows should come,” said N S Venkatesh, Chief Executive Officer, Amfi, in a conference call. However, net inflows of Rs 76,990 crore in May lifted the average asset under management (AUM) for the month to Rs 25.43 lakh crore from Rs 25.27 lakh crore in April, despite the crisis in the credit market that affected net asset values of certain debt/income funds. AUM at the end of May was Rs 25.94 lakh crore.
The income and debt-oriented funds segment too saw net inflows to the tune of Rs 70,119 crore, though down from the Rs 1.20 lakh crore seen in the month of April. Most of that came into liquid funds that recorded net inflows of Rs 68,583 crore. Equity schemes continued to have positive inflows at Rs 5,407.75 crore, compared with Rs 4,608.74 crore in April.
SIP flows too stayed steady— SIP inflows at Rs 8,183 crore were marginally lower than April inflows of Rs 8,237 crore. “Across the spectrum, it is doing well, slowly with the uncertainties of elections behind us … Economic factors are still favourable for the country. We will see growth coming back to the table, and with that, we will see more people coming into the equity market,” said Venkatesh.