September Sees ₹1.02 Lakh Crore Withdrawn from Debt Funds

Fixed-income mutual funds witnessed a sharp reversal in September, with net outflows totaling ₹1.02 lakh crore, a steep jump from the modest ₹7,980 crore redemptions seen in August, according to AMFI data.

Liquid and Money Market Funds Under Pressure

Liquid funds bore the maximum impact, with ₹66,042 crore withdrawn during the month. Money market funds also faced significant outflows of ₹17,900 crore, indicating investors’ preference to avoid even short-term debt instruments amid market uncertainty.

Overnight and Short-Duration Funds

Overnight funds bucked the trend, registering inflows of ₹4,279 crore, suggesting investors were parking cash temporarily. Short-duration and ultra-short duration funds faced pressure, with ultra-short duration funds seeing ₹13,606 crore in outflows. Low-duration and short-duration funds recorded redemptions of ₹1,253 crore and ₹2,173 crore, respectively.

Medium- and Long-Duration Funds

Medium-duration funds remained largely stable with marginal outflows of ₹157 crore, while medium-to-long duration funds saw a small inflow of ₹103 crore.

Credit Risk and Gilt Funds

Credit risk and gilt funds continued to face cautious investor sentiment, with net redemptions of ₹256 crore and ₹615 crore, respectively, reflecting reluctance toward lower-rated and longer-tenor instruments.

Also Read: Best Performing Nifty 1D Rate Liquid ETFs in October 2025!

Conclusion

September’s sharp outflows highlight a defensive shift in investor behavior, with preference for ultra-short and overnight funds over traditional liquid and medium-term debt categories.

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