The Hindu Business Line : MFs witness Rs 23,542-cr outflows in Sept

Mutual funds saw net outflows of Rs 23,542 crore in September, indicating redemption pressures, according to data released by the Association of Mutual Funds in India.

Most of the fund outflows were in the liquid and money market categories.

Funds were redeemed to meet advance tax payments in September. Outflows in liquid and money market section have been placed at Rs 28,653 crore against net inflows in the category in August at Rs 3,950 crore.

"This is seen every year due to advance tax payments in September and withdrawals prior to quarterly results," said Mr Sandesh Kirkire, Chief Executive Officer, Kotak Mahindra Asset Management Co Ltd.

However, outflows in liquid-money market category in September 2005 was only Rs 1,153 crore.

"There was hardly any funds in this category earlier. Also, most of the money is parked in the liquid fund category by corporates and banks. Since they have to pay advance tax, there have been redemptions," said Mr Kirkire.

"Corporate earnings this year have been very buoyant leading to a higher tax out go," said Mr Amandeep Chopra, Senior Vice-President, UTI Mutual Fund. Liquidity has declined in the system, he added.

Fresh funds estimated at Rs 684 crore have re-entered equity growth funds in September.

These funds had seen outflows of Rs 650 crore in August.

Gilt funds and balanced funds are two other categories that have seen net outflows of Rs 128 crore and Rs 10 crore, respectively, in September.

September saw the launch of 25 schemes in various categories.

The mutual fund industry witnessed a 5.08 per cent decline in asset base in September, placing the total asset base at Rs 2,91,199.81 crore.