The Hindu Business Line : Equity funds continue to witness net outflow

Net outflows from equity funds continue. In August, equity funds witnessed net outflows of Rs 650 crore as per figures released by The Association of Mutual Funds in India (AMFI). The redemption in equity funds in July was Rs 209 crore.

Short-term View

Mutual fund managers trace the outflows to redemption by investors with a short-term view. "Investors who came in when markets were at the peak, redeemed, after they saw the fall in NAVs of Equity Funds. However, the sell-off has been largely by institutional investors. Retail investors have continued to maintain faith in equity funds as they come with a long-term view," said Mr A. Balasubramanian, Chief Investment Officer, Birla Sun Life MF.

Some managers, however, think the redemptions are not significant against the size of the MF industry. "After the market fall in May, equity investors were scared but are now looking at an orderly development of equity markets. This will lead to increased investment in equity funds," said Mr Ved Prakash Chaturvedi, Managing Director, Tata Asset Management Ltd.

The overall inflow of funds in mutual funds has also shrunk in August. As against Rs 20,302 crore for July, the industry saw only Rs 11,235 crore of fresh investments.

Other Funds

Liquid-money market funds saw inflows of Rs 3,950 crore which is significantly lower than July's Rs 15,517 crore. Income funds have also seen net inflows of Rs 7,826 crore while balanced funds saw inflows of Rs 105 crore and ELSS funds Rs 98 crore. Gilt funds continue to witness net outflows for August at Rs 94 crore. In July, the outflows stood at Rs 261 crore.

In August, 27 new funds were launched in the income fund category.

The overall asset base of the MF industry has increased to Rs 3,07,106.30 crore in August from Rs 2,87,266.90 crore in July.

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