The Indian mutual fund industry experienced a significant decline in net inflows during August 2024, with a drop of 43% compared to the previous month. Total inflows for the month amounted to ₹ 1.08 lakh crore, down from ₹ 1.89 lakh crore in July. The primary driver of this decline was a substantial reduction in inflows into debt mutual funds, which plummeted by 62%.
Debt funds received net inflows of ₹ 45,169 crore in August, a stark contrast to the ₹ 1.19 lakh crore recorded in July. Overnight, liquid, and money market funds collectively accounted for approximately 86% of the total inflows, with overnight funds leading the pack at ₹ 15,105 crore. Banking and PSU funds witnessed the highest outflows at ₹ 1,549 crore.
Of the 16 debt fund categories, 12 recorded net inflows in August. While this represents a slight improvement from the previous month, categories such as Banking and PSU, Floaters, Low Duration, and Credit Risk funds continued to experience outflows. Notably, Medium Duration funds, which had seen consistent outflows, recorded marginal inflows for the first time in 15 months. However, this does not necessarily indicate a resurgence of investor interest in higher-yielding debt funds.
Key Inflows in August:
Overall, the August data highlights a shift in investor sentiment towards lower-risk debt fund categories as market uncertainties persist.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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