INSUBCONTINENT EXCLUSIVE:
Mumbai: The liquidity crunch in the wake of the ILFS fiasco has resulted in money flowing into liquid schemes of large mutual funds owned by
This is about 50-60 per cent of the total flows of around Rs 60,000-70,000 crore into liquid funds during the month, according to unofficial
estimates.
Milind Barve, CEO of HDFC Mutual Fund, in a conference call with investors after the September quarter results, said average
assets under management (AUM) in HDFC Liquid Fund moved up to Rs 75,000 crore to Rs 80,000 crore from Rs 45,000 crore to Rs 50,000 crore in
September.
The liquid mutual funds category had assets under management of Rs 3.95 lakh crore as of September 2018
They saw outflows of Rs 1.5 to Rs 1.7 lakh crore in September as corporates withdrew for advance tax payments, and fears of liquidity drying
up after ILFS defaulted on payments to some of the creditors.
Usually, money flows out of liquid schemes in September and moves in again in
the first week of October
This time, however, only half the money has come back so far with corporates preferring to keep it with bank fixed deposits of short
durations as they are worried about the holdings of debt mutual funds.
The chief executive of a rival domestic fund house said money is
Out of the Rs 1.5 lakh crore that was redeemed from liquid funds in September, Rs 70,000 crore has come back in October and half of it has
gone to HDFC AMC, he said.
Liquid funds are used mainly by corporate investors to park surplus funds for short period of time and to manage
Some retail investors and HNIs use this as part of their emergency fund corpus or to invest into equity funds in a staggered manner
Belapurkar, director ( fund research), Morningstar India.
They invest in very short-term market instruments like treasury bills, government
securities and call money
As per data from Value Research, in the last one year, liquid funds have given a return of 6.69 per cent.
