Why There Is Trouble Brewing In Debt Market?

The volatility at the equity markets is a well-known fact and there are phases when it might underperform. During such uncertain times, it is necessary to park some funds in debt products. Debt mutual funds primarily invest in fixed income instruments like government securities, bonds, treasury bills and money market instruments. They are best suited for the investors who do not want to take chances by investing in a highly volatile equity market. But what happens when the debt funds themselves go through myriad uncertainties? The mutual fund industry’s asset under management (AUM) stood at Rs22.04 lakh crore (trillion) in September, a dip of 12.5 per cent against the AUM of Rs25.20 lakh crore in August. The debt funds for September saw the outflows of   Rs2,44,522 crore. Rahul Singh, Fund Manager (Fixed Income), LIC Mutual Fund Asset Management, said “Outflow was...