‘MFs should be prepared for times of fund outflows’

A senior regulatory official had a word of caution for the mutual fund industry, buoyant with record inflows in recent months. G Mahalingam, whole time member, Sebi, urged mutual fund industry captains to think of how the industry will behave once flows come down, when number of SIPs come down and when credit flow into the industry starts.

The industry has seen strong growth in assets post demonetisation with assets under management surging from Rs 6.50 lakh crore in November 2016 to Rs 22.79 lakh crore in November 2017.

“While the going now is good, it is important for the industry to learn to manage liquidity when there could be outflows,” said Mahalingam. “Though mutual fund is a pass through product, there is a need for a wall of protection which is going to be its loss absorbing capacity,” he said at a summit organised by an industry body.