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The recently-created overnight fund category of the mutual fund industry has been gaining good traction.
The average assets under management (AUM) of the mutual fund industry in the overnight fund category have grown five times over the last 10 months to ₹52,525 crore as of January end, against ₹11,567 crore as of April end.
The number of folios under the overnight funds have more than doubled to 46,763 (21,363) as of January end.
Overnight fund is a new category of debt mutual fund schemes created when SEBI, in October 2017, re-categorised mutual fund schemes in order to bring about uniformity in products. The open-ended fund invests in debt and money market instruments with overnight maturity of just one day. Overnight funds are considered most liquid and relatively the safest debt schemes.
“Overnight funds are ideal for first-time investors in mutual funds and considered a good start towards building a financially-sound mutual fund portfolio,” said NS Venkatesh, Chief Executive Officer, Association of Mutual Funds in India (AMFI).
The fact that the average AUMs in overnight funds have grown five times, combined with the number of folios too growing more than two times, is a good indicator of the growing affinity of investors towards this fund category, he added.
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