Debt MFs see Rs 91,392 crore inflow in July; investors' focus on short-duration profile

New Delhi: Mutual funds focussed on fixed-income securities witnessed a multi-fold surge in investment to Rs 91,392 crore in July, with short duration funds contributing a major chunk of the infusion.

Barring credit risk funds, all the individual categories that invest in fixed-income securities or debt funds saw inflows, data with the Association of Mutual Funds in India (Amfi) showed.

Given the current interest rate scenario, investors are largely focusing on fixed income categories having a relatively shorter duration profile.

In addition to that, funds with pristine credit quality, especially from categories such as money market, short duration, corporate bond and banking and PSU, continue to gain traction, highlighting investors' preference for safety in this segment.

According to the data, mutual funds (MFs) that invest in fixed-income securities saw an inflow of 91,392 crore in July, as compared to Rs 2,862 crore inflow in June.

The inflow stood at Rs 63,665 crore in May and Rs 43,431 crore in April.

Among fixed-income securities, low duration funds saw an infusion of Rs 14,219 crore, liquid schemes (Rs 14,055 crore) and corporate bond funds (Rs 11,910 crore).

In addition, the ultra-short duration category witnessed a net infusion of Rs 9,332 crore, inflow in money market funds stood at Rs 9,067 crore and banking and PSU segment saw an investment of Rs 6,323 crore.

"Such inflows show that investors have become comfortable investing in debt funds again after the big fiasco in April 2020. RBI's measures to instill confidence in debt fund investors seem to be showing results," Groww Co-founder and COO Harsh Jain said.

However, credit risk funds saw an outflow of Rs 670 crore in the period under review, which was much lower than a withdrawal of Rs 1,494 crore in June, Rs 5,173 crore in May and Rs 19,239 crore in April.

The assets under management of the debt mutual funds rose to Rs 12.64 lakh crore in July-end from Rs 11.63 lakh crore in June-end.