The average maturity of our gilt fund too has been increased to 5.2 years from three years. But this benign interest rate outlook need not be a long term phenomenon. In fact save for a three month benign view, most debt fund managers are unwilling to predict easy money conditions. However, as interest rates have softened, yields on money market funds have fallen. But large scale inflows into debt funds per se are yet to happen, says Kamdar.
Investors still continue to play safe and stick to liquid funds.
According to the Association of Mutual Funds in India, while income funds saw a net inflow of Rs 341 crore in October 2000, liquid and money market funds saw a net inflow of Rs 820 crore during the same period. Fund marketers now expect a gradual lateral sift away from liquid funds into income funds. But they admit that large scale inflows are yet to happen. To woo the reluctant brides, funds have now taken to launching serial plans which aim at offering predictable, albeit not assured, returns. The basic premise of these plans is that the investor decides the approximate time period for which he wants to commit the investment and enters a plan which matures within that time frame, let s say three months from now.