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<p>Market correction is seen as the right time to enter the stock market. But when the returns are good, investors tend to carry out profit booking as well during this period.</p>

<p>This was perhaps the case with liquid mutual funds.</p>

<p>Because of healthy returns in the recent past, liquid <a target="_blank" href="https://mintgenie.livemint.com/news/personal-finance/mutual-fund-portfolios-have-taken-a-beating-4-reasons-why-that-must-not-stop-us-from-investing-151655210516597">mutual funds</a> witnessed an outflow of  <span class='webrupee'>₹</span>15,782 crore during last month. It was followed by ultra-short duration fund that saw an outflow of nearly  <span class='webrupee'>₹</span>10,058 crore.</p>

<p>There are 37 schemes under liquid fund category and the total net assets under management (AUM) as on June 30 was highest among all debt-oriented funds i.e.,  <span class='webrupee'>₹</span>3,64,492 crore followed by corporate <a target="_blank" href="https://mintgenie.livemint.com/news/personal-finance/should-you-invest-in-debt-funds-through-sip-151656387677819">debt funds </a>with total assets of  <span class='webrupee'>₹</span>1,15,545 crore.</p>

<h3><strong>What are liquid funds?&nbsp;</strong></h3><p>A liquid fund is a <a target="_blank" href="https://mintgenie.livemint.com/news/personal-finance/5-things-you-should-know-before-investing-in-debt-funds-151655456025762">debt mutual fund</a> that invests money for a short span of time and which may be needed in a few weeks or perhaps months later.</p>

<p>Investors can take their money out at any point in time, sometimes as early as the next day. This means investors can earn accrual for every day of the investment.</p>

<p>Besides, no tax deducted at source (TDS) is levied on the redemption of these mutual funds.</p>

<p>According to the Value Research data, liquid funds posted highest returns in past three months among other debt fund such as corporate bonds, short duration and medium duration funds.</p>

<p>As the table below shows, liquid fund’s past one year return was 3.55 percent, whereas short duration funds delivered 3.77 percent return, medium duration funds gave 2.65 percent and corporate bonds gave 2.34 percent.</p>

<table><tbody><tr><td><strong>Fund category&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</strong></td><td><strong>3-month&nbsp;</strong></td><td><strong>1 year</strong></td></tr><tr><td>Liquid&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</td><td>1.01</td><td>3.55</td></tr><tr><td>Corporate bond&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>-0.04</td><td>2.34</td></tr><tr><td>Short duration&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>0.03</td><td>3.77</td></tr><tr><td>Medium duration&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>-0.22</td><td>2.65</td></tr></tbody></table>

<p>(<i>Source: Value Research</i>)</p><h3><strong>Three-month returns</strong></h3><p>In the past three months, the top-performing liquid funds gave returns higher than 4 percent per annum. For instance, Navi Liquid fund gave 4.35 percent return, Baroda BNP Paribas Liquid Fund gave 4.16 percent, ITI Liquid Fund delivered 4.15 percent return and Mahindra Manulife Liquid Fund posted 4.15 percent return in the past three months ending June 30.</p>

<table><tbody><tr><td><strong>Liquid Funds&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</strong></td><td><strong>Three-month</strong></td></tr><tr><td>Navi Liquid&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>4.35</td></tr><tr><td>Baroda BNP Paribas Liquid Fund&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>4.16</td></tr><tr><td>ITI Liquid Fund&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>4.15</td></tr><tr><td>Mahindra Manulife Liquid Fund&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>4.15</td></tr></tbody></table>

<p>(<i>Source: AMFI, as on June 30, 2022</i>)</p><h3><strong>One-year returns</strong></h3><p>In past one year, top-performing liquid fund gave anywhere between 3-4 percent return. Mahindra Manulife Liquid Fund gave 3.71 percent, Navi Liquid gave 4.05 percent and Quant Liquid Plan delivered 4.12 percent.</p><p>Most other schemes in this category gave somewhere around 3 percent return.</p>

<table><tbody><tr><td><strong>Liquid Funds&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</strong></td><td><strong>1-year</strong></td></tr><tr><td>Quant Liquid Plan&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;</td><td>4.12</td></tr><tr><td>Navi Liquid&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;</td><td>4.05</td></tr><tr><td>Bank of India Liquid Fund&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>3.70</td></tr><tr><td>Mahindra Manulife Liquid Fund&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>3.71</td></tr></tbody></table>

<p><i>(Source: AMFI, as on June 30</i>)</p>

Investors dump liquid mutual funds worth  <span class='webrupee'>₹</span>16,000 crore in June even as returns remain ‘healthy’

Liquid mutual funds witnessed an outflow of  <span class='webrupee'>₹</span>15,782 crore during last month. It was followed by ultra-short duration fund that saw an outflow of nearly  <span class='webrupee'>₹</span>10,058 crore.

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Investors dump liquid mutual funds worth ₹16,000 crore in June even as returns remain ‘healthy’