Liquid schemes in December 2010 saw net outflows (of Rs 12,500 crore) for the first time in a year
Mumbai: Inflows into liquid schemes of mutual funds have dropped due to a liquidity crunch in the system. Liquid schemes saw net outflows (of Rs 12,500 crore) for the first time in a year in December 2010.
During April-November 2010, net inflow into liquid schemes was Rs 25,481 crore. The net inflow in liquid schemes was down to Rs 12,981 crore for the nine-month period ended December 31, 2010, against net outflow of Rs 5,310 crore a year earlier, according to data on AMFI website.
The total sales under 51 liquid schemes in November 2010 was Rs 5,94,460 crore, which was down to Rs 5,41,073 crore for the same number of schemes in December 2010.
The AUM of liquid funds at the end of December 2010 fell to Rs 88,681 crore from Rs 99,190 crore a month earlier.
The rise in interest rates in 2010 had increased the appetite of institutional investors for liquid schemes. They cut down on their investments in liquid schemes after the tightening of monetary policy by the Reserve Bank of India (RBI) in recent months.
The decline in flows into liquid schemes was because of the liquidity crunch and marginally, due to the impact of the new regulation on cut-off time for investments in liquid schemes in November, said a senior official from a large fund house. He, however, said the decline in flows due to the regulatory change was only for a short period of time.
The regulation had made it mandatory for mutual funds to allot units to investors only after the funds for the entire amount of purchase were credited to the accounts of the respective liquid schemes.
Earlier, investors would get units allotted before the funds were actually received in the scheme accounts. If the NAV of a scheme rises the next day, the investor would get the benefit of the appreciation without his funds actually reaching the scheme account.
