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Advance tax payments and redemptions from fixed maturity plans resulted in net outflows of Rs 44,349 crore from mutual funds in December.
The total AUM as at end December stood at Rs 6.26 lakh crore.
Traditionally, December has always seen more outflows than inflows owing to corporate taxes. This December was no exception with the industry seeing outflows to the tune of Rs 44,349 crore.
“December does see a lot of outflows due to the corporate tax payments. But the outflows could also be attributed to the one-month and three-month FMP redemptions,” said Mr Hemant Rastogi, CEO, Wiseinvest Advisors.
Income and liquid funds have seen net outflows of Rs 45,198 crore in the month.
Equities signal reversal
However, equities saw more inflows into the system, signalling a reversal of sorts. Equity schemes brought in Rs 877 crore in the net in December, as compared with the November net outflows of Rs 41 crore. (Equity schemes in calendar 2010 saw a net outflow of Rs 16,179 crore).
“Though the quantum may vary month on month, I would expect there to be more inflows into equity funds in the coming months. This is a positive trend,” said Mr Sanjay Sinha, CEO, L&T Mutual Fund.
Though AMCs see this as a positive trend, analysts are still sceptical and do not want to jump to any immediate conclusions. “It is difficult to say anything based on data for one single month. But the fact remains that equity as an asset class will always exist as an option for investors. Slowly and surely, equity schemes will obviously see more inflows in the future,” said Mr Rastogi.
The net outflow for the industry in calendar 2010 stood at Rs 32,164 crore.
Gold ETFs saw net inflows of Rs 111 crore in December 2010 while the other ETFs have seen net outflows of Rs 162 crore. These funds saw net inflows of Rs 172 crore and Rs 200 crore, respectively, in the month of November 2010.
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