Equity mutual fund investors booked earnings in the month of November as Sensex and Nifty surged to fresh highs, resulting in the most outflows from equity oriented schemes so far this fiscal year. In the preceding month, equity oriented mutual fund schemes saw net flows of a enormous Rs 12,917 crore, information from Association of Mutual Fund Investors (AMFI) showed. Experts think that the outflows are a outcome of profit booking immediately after the powerful rally of the current months has jacked up stock markets. Overall, mutual funds saw net inflows of Rs 27,194 crore in November against inflows of Rs 98,575 crore in the preceding month.
The enhanced redemption is also owing to the run in midcap and smallcap stocks in current months. “All investors who were stuck in small and midcap stocks have also come out with some profits after recouping the principal amount,” Omkeshwar Singh, head-RankMF, Samco Group told TheSpuzz Online. Stock markets have rallied, aided by powerful foreign flows and some investors do worry that the industry has been pushed greater creating them uncomfortable, according to Omkeshwar Singh. Hybrid funds saw outflows worth Rs 5,249 crore in November of which the biggest outflows are from Balanced hybrid funds which, Omkeshwar Singh mentioned, are dominated by equity.
However, regardless of the significant redemptions, some professionals think that investors have not fully provided up on equities. “All of these outflows would not have gone completely out of equities as an asset class, but probably moved to direct equities as investors have had some successes in past few months investing directly, some part of this liquidity could have also flown to real estate with renewed interest amongst genuine buyers wanting to own home at lower interest rates and falling taxes and prices,” mentioned Akhil Chaturvedi, Associate Director & Head of Sales, Motilal Oswal. He added that some investors could also be holding on to money to deploy the identical immediately after any meaningful correction.
Among equity schemes, multi cap fund investors saw outflows worth Rs 2,842 crore even though significant cap funds recorded outflows of Rs 3,289 crore. All ten equity oriented fund categories saw outflows in the month of November. In the month of October the outflows had been only at Rs 2,724 crore. With this equity funds have now observed 5 straight months of net outflows regardless of the stock industry scaling to fresh record highs.
In the debt fund category, net redemptions had been observed only by investors of overnight funds, liquid funds, and credit danger funds in the preceding months. Overnight funds recorded redemptions of Rs 15,547 crore against inflows of Rs 4,940 crore in October. Rs 8,415 crore worth of outflows had been observed amongst liquid funds against Rs 19,582 crore of inflows in the preceding month. Net inflows to debt oriented schemes in October was at Rs 44,983 crore.