Debt mutual funds find their mother lode after mining market depths

Strike a rich vein after a tough three-year haul of ₹2.8 trillion in outflows

Debt mutual fund (MF) schemes found favour in 2024-25 (FY25), reversing the net outflows recorded in the prior three financial years.

 

Active debt-oriented schemes saw net inflows of ₹1.4 trillion in FY25, compared to a ₹23,000 crore outflow in 2023-24. Outflows were even higher in 2022-23 and 2021-22, at ₹68,000 crore and ₹1.84 trillion, respectively.

 

Experts attribute the flow reversal to favourable macroeconomic conditions, such as easing inflation, expectations of interest-rate cuts, and improved liquidity.

 

“With the Reserve Bank of India (RBI) maintaining a careful yet supportive stance, investors turned to debt funds as a means of capital preservation and