{"id":47956,"date":"2022-06-13T14:57:00","date_gmt":"2022-06-13T09:27:00","guid":{"rendered":"https:\/\/tradebrains.in\/features\/?p=47956"},"modified":"2022-06-13T14:56:01","modified_gmt":"2022-06-13T09:26:01","slug":"biz-mutual-funds-3","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-mutual-funds-3\/","title":{"rendered":"Debt mutual fund sees Rs 32,722 cr outflow in May on rising interest rates"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2406496621\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p>Mutual funds focused on investing in fixed-income securities witnessed a net outflow of Rs 32,722 crore in May in the wake of Reserve Bank of India (RBI) stance on monetary policy turning hawkish to tackle inflation driven by global factors.<\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-4048390012\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div>\n<p>This comes following an inflow to the tune of Rs 54,656 crore in April, data from the Association of Mutual Funds in India (Amfi) showed.<\/p>\n<p>In addition, there has been a reduction in the number of folios from 73.43 lakh to 72.87 lakh folios between April and May 2022.<\/p>\n<p>Debt funds have always been considered as a safer investment option, especially during volatile markets. However, rising interest rates, a volatile macro environment and higher yields have likely impacted investors&#8217; investing preferences within debt markets.<\/p><div class=\"trade-content_5\" id=\"trade-129784299\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p>Kavita Krishnan, Senior Analyst &#8211; Manager Research, Morningstar India, said that rising food, commodity and fuel prices, among other macro factors like the war in Ukraine likely led to the rate hike of 40 basis points (bps) in May 2022. Moreover, RBI&#8217;s focus on curbing inflation led to expectations of further rate hikes going forward.<\/p>\n<p>&#8220;Given the current scenario and the broader market expectations, most categories of debt funds have been witnessing outflows except for overnight and liquid funds. Single-digit returns and a marked preference towards other asset classes like equity have also likely impacted flows into debt funds,&#8221; she added.<\/p>\n<p>Making similar statement, Alok Agarwala, EVP and Chief Research Officer, Bajaj Capital, said that outflow could be primarily attributed to the change in RBI&#8217;s stance in previous months off cycle policy meeting in which RBI not only increased the policy rate by 40 bps to 4.40 per cent but also increased the CRR (Cash Reserve Ratio) rate by 50 bps to 4.5 per cent.<\/p>\n<p>&#8220;In the same policy meeting on May 4, RBI emphasised on &#8216;withdrawal of accommodation&#8217; to ensure that inflation remains within the target going forward. It has jolted the fixed income investors as it indicated that now even the Indian central bank would not like to be seen behind the curve and let the inflation runaway. It leads to upward movement in yield across the curve that results in mark-to-market losses in the investor&#8217;s portfolio in most of the debt categories (except Overnight and Liquid Fund),&#8221; he added.<\/p>\n<p>Out of the 16 fixed-income or debt fund categories, 12 witnessed net outflows in May. The net inflows were seen only in four categories &#8212; Overnight Fund, Liquid Fund, Gilt Fund &amp; Gilt Fund &#8212; with 10 year constant duration.<\/p>\n<p>Money market funds saw a significant outflow of Rs 14,598 crore in this category, followed by short-duration funds (Rs 8,603 crore), ultra-short-duration funds (Rs 7,105 crore) and low-duration funds (Rs 6716 crore).<\/p><div class=\"trade-content-10\" id=\"trade-219207552\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div>\n<p>&#8220;This move could be a sign of investors&#8217; short-term money requirements due to the current market scenario of rising repo rates and inflation rate,&#8221; Priti Rathi Gupta, Founder, LXME, said. PTI SP HVA<\/p>\n<div class=\"trade-after-content\" id=\"trade-2610766191\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Mutual funds focused on investing in fixed-income securities witnessed a net outflow of Rs 32,722 crore in May in the wake of Reserve Bank of India (RBI) stance on monetary policy turning hawkish to tackle inflation driven by global factors. This comes following an inflow to the tune of Rs 54,656 crore in April, data [&hellip;]<\/p>\n","protected":false},"author":13,"featured_media":22388,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1697,31,1789],"tags":[],"class_list":["post-47956","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-news","category-trending-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Debt mutual fund sees Rs 32,722 cr outflow in May on rising interest rates - Trade Brains Features<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tradebrains.in\/features\/biz-mutual-funds-3\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Debt mutual fund sees Rs 32,722 cr outflow in May on rising interest rates\" \/>\n<meta property=\"og:description\" content=\"Mutual funds focused on investing in fixed-income securities witnessed a net outflow of Rs 32,722 crore in May in the wake of Reserve Bank of India (RBI) stance on monetary policy turning hawkish to tackle inflation driven by global factors. 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