Overnight funds recorded heavy outflows of ₹37,624 crore, while liquid funds saw withdrawals of ₹14,051 crore.
“The pullback reflected a mix of month-end treasury adjustments, higher call money rates and advance-tax related withdrawals, effectively reversing the temporary surge seen last month,” said Nehal Meshram, Senior Analyst, Morningstar Investment Research India.
Despite pressure in the broader liquidity segment, short-duration categories remained resilient. Ultra-short duration funds garnered ₹8,361 crore, low-duration funds saw inflows of ₹4,981 crore, and money market funds attracted ₹11,104 crore, reflecting continued interest in high-quality, short-maturity instruments. Corporate bond funds added ₹1,525 crore, while credit risk funds recorded outflows of ₹118 crore.
Longer-duration and rate-sensitive categories stayed weak. Dynamic bond funds saw withdrawals of ₹607 crore, and long-duration, gilt, and constant-maturity gilt funds reported redemptions as investors avoided extending duration amid volatile long-term yields.
Bond markets mirrored this sentiment through November. According to Puneet Pal, Head–Fixed Income at PGIM India Mutual Fund, bond yields rose with a steepening bias, with the 10-year benchmark moving from 6.51% to 6.54% after stronger-than-expected Q2 GDP growth of 8.2% effectively priced out hopes of a near-term rate cut. Long-end yields remained under pressure despite RBI’s secondary-market OMO purchases.
Market participants expect flows to remain anchored in shorter-duration, high-quality strategies until there is greater clarity on the timing and pace of monetary easing.