Debt Mutual Funds Face Massive ₹1.32 Lakh Crore Outflow in December

• Debt-oriented mutual funds recorded net outflows of ₹1.32 lakh crore in December, significantly higher than November's ₹25,693 crore.
• Outflows were primarily driven by liquid, money market, and ultra-short duration funds due to year-end corporate cash requirements.
• Himanshu Srivastava of Morningstar noted these outflows reflect year-end treasury activity and evolving interest-rate expectations.
• Corporates and institutions withdrew cash for advance tax payments, balance-sheet adjustments, and working-capital needs, a typical seasonal trend.
• Floater funds saw net inflows as investors sought lower duration risk and stable yields amid interest rate uncertainty.

Why It Matters: Debt mutual funds experienced substantial outflows in December, mainly due to corporate year-end financial activities.