Mutual fund investors continued to redeem funds from equity MFs for the sixth straight month in December as the markets touched new highs. However, inflows via systematic investments plans (SIPs) remained sturdy in spite of net outflows from equity schemes.
Data from the Association of Mutual funds in India (Amfi) show that equity-oriented schemes saw net outflows of Rs 10,147.12 crore, with all the 10 categories witnessing redemptions. Overall, the MF sector saw net inflows of Rs 2,967.86 crore in December, when net AUM as on December was at Rs 31.02 lakh crore.
Amfi information indicate that fund mobilised by equity schemes had been Rs 26,073.16 crore in December, when redemptions had been of `36,220.28 crore. Market participants say investors are booking income as equity markets touch new highs. In December, the Sensex and Nifty had been up by 8.2% and 7.8%, respectively.
NS Venkatesh, chief executive at Amfi, says, “Equity markets have touched all time high and investors are booking profits. I think if markets continue to do well, we might see investors continue to book profits.” Between July and December, equity MFs witnessed net outflows of practically Rs 33,000 crore. In November, equity schemes had noticed outflows of Rs 12,917.36 crore.
The inflow in SIPs was Rs 8,418.11 crore in December, compared with Rs 7,302.16 crore in November. Officials at Amfi stated about Rs 500 crore of SIPs due in November had been adjusted in December as the final 3 days of November had been non-small business days.
Market participants also say that some of the funds is even moving from equity mutual funds to direct equity. “Re-allocation of large part of these redemptions would be in direct equities where the experience of investors have been good in recent past, alongside demand for IPOs and real estate would also have sucked up the liquidity,” stated Akhil Chaturvedi, associate director and head of sales, Motilal Oswal Asset Management Company.
Open-ended debt-oriented schemes saw net inflows of Rs 13,682.77 lakh crore in December. Officials in the sector say that there is flight to security towards debt funds as investors are uncertain about the present rally in the equity markets.