Growth fear to aid debt mutual funds

The equity-oriented mutual funds could also attract funds in the second half of this fiscal if the situation improves on the global and domestic fronts, they said.

Mutual Funds Check for top funds

"Recently, the mutual fund industry saw more flows into the debt-oriented funds, especially on the fixed maturity plans (FMPs) and short-term funds. Going ahead, investors' interest is expected to be more in these debt-oriented funds due to continuing uncertainty in both domestic and global economy," IDBI Mutual Fund managing director and chief executive Debasish Mallick said here.

Given the possibility of reduction in interest rates, fund flows into FMPs and short-term funds will be more in the near-term, he said.

"When there is a likelihood of reduction in interest rates, fund flows will be more into FMP-kind of schemes. Also, short-term funds (debt oriented) are also likely to attract more funds due to possible capital gains," Mallick said.

Referring to investment in equity schemes, industry experts said it was difficult to attract fresh funds due to lacklustre performance of the equity market.

"Fresh fund flow to equity schemes will be difficult at this point in time. However, I don't see any redemption pressure due to a panic kind of reaction," he said.

UTI Mutual Fund executive vice-president and fund manager Swati Kulkarni said though fresh fund flows to equity schemes seems little difficult,

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