Debt mutual funds see ₹1.83 lakh crore outflows in September, liquid schemes lead

Debt mutual fund schemes recorded net outflows of ₹1.83 lakh crore in September, compared with outflows of ₹8,127 crore in August, according to data from the Association of Mutual Funds in India (AMFI).

The outflows were led by liquid and money market funds.

Liquid funds saw net outflows of ₹95,743 crore, while money market funds recorded outflows of ₹50,846 crore. Ultra-short-duration funds saw outflows of ₹11,729 crore, low-duration funds ₹6,632 crore and overnight funds ₹7,281 crore.

Umesh Sharma, Chief Investment Officer – Debt at The Wealth Company Mutual Fund, attributed the outflows to quarter-end requirements and advance tax payments, which typically affect institutional cash management.

Varun Gupta, CEO of Groww Mutual Fund, said the reversal in overall mutual fund flows was driven largely by debt schemes, with liquid and money market funds accounting for the biggest outflows. He noted that both categories had recorded net inflows in August.

Outflows also continued in duration-oriented debt categories. Corporate bond funds saw net outflows of ₹4,652 crore, while banking and PSU debt funds recorded outflows of ₹2,412 crore. Gilt funds, however, attracted inflows of ₹600 crore.

Sadiya Khan, Chief Investment and Solutions Officer at Mirae Asset Sharekhan, said the industry’s assets under management (AUM) declined 5.1% to ₹82.64 lakh crore in September from ₹87.08 lakh crore in August. The industry recorded total net outflows of ₹1.33 lakh crore during the month, compared with net inflows of ₹41,354 crore in August.

Despite the outflows from debt schemes, equity mutual funds continued to attract investments. Net equity inflows rose 31% month-on-month to ₹38,307 crore in September, according to the figures cited by the fund houses.

Sharma said equity inflows remained strong despite weaker markets, while systematic investment plan (SIP) contributions reached a record ₹32,490 crore in September.

The data also showed net outflows of ₹457 crore from hybrid funds, compared with inflows of ₹10,045 crore in August. Arbitrage funds recorded outflows of ₹3,956 crore, while multi-asset allocation funds attracted inflows of ₹3,667 crore.