Debt funds drive inflows into mutual funds during Nov: Report

Despite the equity funds seeing outflow for the fifth consecutive month, the overall inflows into mutual funds crossed Rs 30 lakh crore for the first time in November, driven by open-ended debt funds and mark-to-market gains after a rally in the equity markets, according to a report. This had the industry-wide mutual fund assets expanding 6.3 per cent in November to settle at a record high of Rs 30.01 lakh crore, with fresh follows totalling Rs 2 lakh in the month from Rs 28 lakh crore in October which was also a record, CRISIL said in the report on Wednesday analysing the Amfi data.

Inflows into open-ended debt funds coupled with mark-to-market gains from equity markets contributed to the record rise in MFs’ asset base in the reporting month even as investors continued to exit equity-oriented and hybrid schemes, according to CRISIL.

Equity funds saw the fifth consecutive month of outflows as investors continued to exit open-ended equity-oriented schemes in the month, with over fivefold spike in outflows from Rs 2,725 crore in October to Rs 12,917 crore in November, primarily due to profit-booking.

Equity markets hit record highs in November, with Sensex and Nifty rallying over 11 per cent during the month.

According to CRISIL, November saw for the first time outflows across all open-ended equity categories since April 2019, when the Association of Mutual Funds of India (Amfi) changed its format of dissemination.

It said large-cap funds bled the most within the category at Rs 3,289 crore, while multi-cap funds and value/contra funds were at second and third, with net outflows of Rs 2,842 crore and Rs 1,323 crore, respectively. Dividend yield funds posted the lowest net outflows at Rs 70 crore, it added.

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Notwithstanding the massive outflows, mark-to-market gains pushed up the open-ended equity fund asset base by 10 per cent to Rs 8.58 lakh crore, helping the category for the first time cross the Rs 8-lakh crore threshold.

Hybrid funds posted net outflows for the fifth straight month with cumulative Rs 5,249 crore in November. Nearly all categories saw net outflows, with aggressive hybrid schemes reporting the highest exits, at Rs 3,731 crore, said the report.

The underlying equity asset class of hybrid scheme asset base rose 5.1 per cent to Rs 3.11 lakh crore, the highest since February this year.

While most open-ended debt funds recorded inflows, low-duration funds saw the highest net inflows within the open-ended debt scheme category in November at Rs 27,108 crore, the highest net inflows since April 2019. But, short-duration and corporate bond funds found favour with cumulative net inflows of Rs 24,187 crore.

But, overnight funds saw sharp outflows of Rs 15,548 crore and the liquid fund asset base also recorded net outflows of Rs 8,415 crore. Credit risk funds saw a net outflow for the 20th straight month, albeit a nominal amount of Rs 15 crore.


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