The Mutual Fund industry ended the year 2020 with an average AUM of 30.96 Lakh crores in the month of December.
Soaring equity markets provided an opportunity for a lot of investors to book profits which was clearly visible from heavy redemptions across equity mutual fund categories. However sectoral and thematic funds still lured interest of investors with a positive inflow.
Anticipation of rate hike in credit policy due to heavy liquidity and fear of inflationary pressure had led to increase in yields and as a result decrease in returns in the first half of December. As a result, categories like Ultra Short Duration, Low duration and money markets faced heavy redemptions.
Liquid and Overnight funds saw inflows as these categories are used by companies to park their short-term money.