New Delhi, Sept. 10 -- Debt mutual funds saw a sharp turnaround in August, moving from a record Rs.1,87,511 crore net inflow in July to a Rs.8,127 crore net outflow in August, according to data from the Association of Mutual Funds in India (AMFI). The reversal was largely concentrated in overnight funds, which saw Rs.30,654 crore of redemptions, while liquid, money market and ultra-short duration funds continued to attract money.

The sharp month-on-month swing, however, does not necessarily signal a change in investors' long-term preference for debt funds. Experts said debt-fund flows are heavily influenced by corporate treasuries and institutional cash-management requirements and can therefore fluctuate significantly around the beginnin...