The downgrading of IL&FS paper to default, led corporates rushing to safety in their debt mutual fund investments. Liquid funds saw outflows to the tune of Rs 1.5 lakh In September due to advance tax payments and redemptions from corporate investors on fears of a contagion effect due to the ILFS default.
While October did see money trickle back into liquid funds, all that went out in September could not come back, as corporates preferred to be with bank deposits and only Rs 55,000 crore came back into liquid funds.
As per industry sources, two thirds of this went into three fund houses namely HDFC, SBI and Kotak. “These fund houses have lower percentage of housing finance companies in their debt portfolios.
These assets management companies are backed by banks with strong brands which have value for corporate investors,”says Rupesh Bhansali, Head (Distribution), GEPL Capital.
HDFC regained its number one position in the Indian MF industry, with its assets under management rising by Rs 21,000 crores to touch Rs 3.28 lakh crores, inching ahead of ICICI Prudential’s Rs 2.99 lakh crore.
SBI MF, the third largest fund house by assets saw its AUM rise to Rs 2.62 lakh crore, due to flows of Rs 14,600 crore into its debt fund schemes. Kotak Mutual Fund too saw fresh flows of Rs 9900 crore coming into its debt schemes. Corporates preferred schemes with large assets under management at times of uncertainty point out analysts.
“Money has flowed into liquid funds with large assets under management. This ensure there are large number of papers in the portfolio and even if something was to go wrong, the impact on the portfolio will be very low,”says Vidya Bala, head (Research), Fundsindia.com
While October did see money trickle back into liquid funds, all that went out in September could not come back, as corporates preferred to be with bank deposits and only Rs 55,000 crore came back into liquid funds.
As per industry sources, two thirds of this went into three fund houses namely HDFC, SBI and Kotak. “These fund houses have lower percentage of housing finance companies in their debt portfolios.
These assets management companies are backed by banks with strong brands which have value for corporate investors,”says Rupesh Bhansali, Head (Distribution), GEPL Capital.
HDFC regained its number one position in the Indian MF industry, with its assets under management rising by Rs 21,000 crores to touch Rs 3.28 lakh crores, inching ahead of ICICI Prudential’s Rs 2.99 lakh crore.
SBI MF, the third largest fund house by assets saw its AUM rise to Rs 2.62 lakh crore, due to flows of Rs 14,600 crore into its debt fund schemes. Kotak Mutual Fund too saw fresh flows of Rs 9900 crore coming into its debt schemes. Corporates preferred schemes with large assets under management at times of uncertainty point out analysts.
“Money has flowed into liquid funds with large assets under management. This ensure there are large number of papers in the portfolio and even if something was to go wrong, the impact on the portfolio will be very low,”says Vidya Bala, head (Research), Fundsindia.com
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