Debt mutual fund investment schemes see an outflow of more than 6,800 crore Rupees in August 2018. This is due to concerns on depreciation of the rupee and increasing oil prices and their influence on inflation and CAD (Current Account Deficit).
The debt mutual funds inflows were about 9,810 crore Rupees in August month of last year, based on data available with AMFI (Association of Mutual Funds in India). The debt mutual funds witnessed redemptions of 6,803 crore Rupees and 7,000 crore Rupees in August and July of this year, respectively, according to the AMFI data.
Debt MFs have actually witnessed net outflows in 4 months out of 5 months in the current fiscal year so far. Hence, the total outflow in the category has reached more than 52,700 crore Rupees so far (April-August) in the current financial year.
Rahul Parikh, Bajaj Capital CEO, said that debt mutual fund investment schemes continued to witness outflows in August 2018 because of depreciation in the domestic currency and the increase in oil prices and their effect on inflation and CAD.
Parikh further said that debt MFs will continue to see outflows, and any RBI action in the currency and/or bond markets are being awaited.
Actually, markets expect OMOs (Open Market Operations) from RBI. This may help in providing some relief to yields and in turn, may help in the reversal of debt MFs outflows, added Parikh.
Earlier in August, N S Venkatesh, AMFI Chief Executive, said that the AMFI’s new campaign planned after the famous “Mutual Funds Sahi Hai” drive will concentrate on creating awareness about the advantages of investing in debt mutual funds, according to Money Control.
At present, just 10 percent of the retail investors invest in debt mutual fund investment schemes, while a majority of investors are showing interest to invest in equity MF schemes, reported The Economic Times.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]