Tax changes slow new MF scheme launches; demand for debt funds takes a hit

The debt-plus-arbitrage strategy will keep volatility lower as in the case of debt schemes, while also ensuring lower tax outgo for investors

Product launches by mutual funds (MFs) have entered the slow lane this financial year (2023-24), with debt fund launches grinding to a halt after the loss of indexation benefit.

The industry had launched 253 new schemes in 2022-23 (FY23), with a majority of offerings being on the fixed-income side. So far this financial year, the total number of launches has stood at 24, with just three of them being on the debt side.

MF executives say they are tracking the demand situation before coming out with any new debt offering.

“The demand in general has come down owing to a