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Outflow from equity MF schemes continue for sixth month in a row

Suresh P Iyengar Mumbai | Updated on January 08, 2021

Investors pull out ₹36,000 crore from equity schemes in last six months

Outflow from equity schemes of mutual funds continued for the sixth month in a row in December on the back of profit-booking by investors as markets hit a record high.

Equity mutual funds registered an outflow of ₹10,147 crore in December against ₹12,917 crore logged in November, as per data released by Association of Mutual Funds in India. All equity schemes except for Dividend yield and thematic funds recorded an outflow last month.

The highest outflow of ₹3,876 crore and ₹3,540 crore was logged by large-cap and multicap funds. This was followed by an outflow of ₹1,641 crore and ₹1,636 crore in value and mid-cap funds.

 

Himanshu Srivastava, Associate Director, Morningstar India said the net outflow from equity schemes would have been higher if not for the NFOs last month across multiple equity categories which collected ₹7,600 crore.

Gross redemptions at ₹36,220 crore were significantly higher than ₹27,113 crore logged in November. Since July, equity-oriented mutual funds have witnessed a net outflow of ₹33,004 crore, he said.

Expensive and over-heated market

Akhil Chaturvedi, Associate Director, Motilal Oswal AMC said there is a general belief that markets are expensive and over-heated. Hence a healthy correction should not be written off, which could create fresh interest in equity mutual funds and the reversal of industry’s negative sales trend.

Despite the Covid pandemic ravaging economy, the equity assets of mutual funds in the last year have increased 15 per cent to ₹9.07 lakh crore against ₹7.89 lakh crore recorded in January as the sharp run-up in the market pushed up the value of asset held in these schemes.

 

Inflow through systematic investment plan was up at ₹8,418 crore against ₹7,302 crore largely due to SIPs registered on holidays in last three days of November were processed in December.

Despite an outflow of ₹11,896 crore from money market schemes, debt funds logged a net inflow of ₹13,862 crore against the inflow of ₹44,984 crore in November.

NS Venkatesh, Chief Executive, AMFI said RBI is expected to keep rates at current levels to support economic growth which is reflected in positive flows in corporate bond funds.

Overall the asset under management of mutual funds was up at ₹31.02 lakh crore last month against ₹30 lakh crore logged in November. Last year, mutual fund assets were up 11 per cent to ₹31.02 lakh crore against ₹27.85 lakh crore in January.

Published on January 08, 2021

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