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Investor attraction for mutual funds appears to be in inverse proportion to the returns on the benchmark indices.
When the BSE Sensex was up 17 per cent in calendar 2010, equity funds saw net outflows of Rs 27,824 crore. This calendar, the Sensex has declined 12 per cent (year-to-date), and the same schemes have seen net inflows of Rs 3,211 crore.
Mixed views
The data, available on the SEBI Web site, follows an expected pattern, say analysts. They say it is a mildly optimistic sign. “After having been burnt in FY-09, investors started redeeming funds and booking profits in 2010. The market is now providing investors opportunities to enter,” said Mr Hiren Dhakan, Associate Fund Manager, Bonanza Portfolio.
This is also an indication of the increase in SIP investments, added analysts.
But not all fund managers share this view. Some are concerned that the mood in the market is not all that upbeat. “There is nervousness in the markets as seen by the high degree of volatility in July and August. Overall, the trend, according to distributors, has not been positive,” said Mr Arindam Ghosh, Head — Retail Sales, JP Morgan Asset Management.
SEBI data differs
“The popular adage goes that — Markets fall the very next day after the investors enter,” said Mr Dhakan.
However, SEBI data for the current calendar year shows net inflows into equity mutual funds for every month, excepting March and April.
Retail investors have become cautious and are showing lesser interest in sectoral and thematic funds including defensive bets such as FMCG and pharmaceutical funds, say people in the trade.
According to fund managers, Gold ETFs are gaining popularity among investors. In the calendar year so far, the assets under management of Gold ETFs have increased by 70 per cent from Rs 3,581 crore in January to Rs 6119 crore in July. In calendar year 2010, the AUM jumped by nearly 178 per cent from Rs 1,262 crore in January 2010 to Rs 3,516 crore in December 2010.
Rising from $1,113 an ounce on January 4, 2010 to $1,614 an ounce on July 29, on the London Bullion Market Association, gold as an asset class has returned 45 per cent in 19 months. This also explains the huge increase in the AUM of gold ETFs over this period in consideration, say experts.
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