Debt mutual funds attracted Rs 1.87 lakh crore in July after two months of outflows. Is the trend set to continue?
Debt mutual funds attracted Rs 1.87 lakh crore in July, reversing June-quarter outflows. Liquid, overnight and money market funds led inflows, while longer-duration categories saw redemptions. Experts said flows reflected seasonal treasury movements and continued preference for liquidity.
Debt mutual funds in July 2026 attracted Rs 1.87 lakh crore, marking a significant reversal from the previous two months of outflows which totaled Rs 2.06 lakh crore. This trend follows a seasonal pattern of June quarter-end outflows being reversed in July, as noted by Sanjay Agarwal, Senior Director at CareEdge Ratings. Liquid funds saw the highest inflow at Rs 1.19 lakh crore, followed by overnight and money market funds, indicating that investors are valuing liquidity and flexibility in their debt portfolios rather than taking on long-term risks.
Despite this, corporate bond funds recorded the highest outflow at Rs 784 crore, suggesting a preference for short-term and liquidity products and investor caution regarding long-term bets.
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