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Markets Soar, But Investors Exit

The equity fund category has witnessed a constant stream of outflows

Call it profit booking, if you will, or being cautious, between the August-to-November, 2009 period, when the markets were mostly rallying, equity investors found it to be an opportune time to pull out their money from the equity funds category.

So much so that in October, the category registered the highest outflows since 2006 as investors pulled out as much as Rs 2,123 crore - in all fairness, the Sensex did fall by 7.18 per cent in that month, but the overall market trend has been upwards for months.

This is evidenced by the month of November, when the Sensex jumped 6.48 per cent, but investors pulled out Rs 1,109 crore. And, over the last four months (August-November), when markets soared 8.01 per cent, investors pulled out a net total of Rs 5,130 crore, making it the fourth straight month of outflows for this category.

Last year around the same period (August-November, 2008) when the world was reeling under the global financial crisis and the markets had tanked 36.66 per cent, though the category witnessed net outflows, the amounts involved were far less. Investors shed a relatively meagre Rs 468 crore in these four months last year. In fact, the month of September last year saw inflows of Rs 604 crore.

Coming back to 2009, since the start of the bull run (March 9, 2009), though March and April witnessed meagre outflows, over the following three months, investors had invested a huge Rs 7,628 crore, especially after market sentiment soared as the Sensex, for these five months, gained 92 per cent. For the period March 31, 2009 to November 30, 2009, the Sensex has gained 107.4 per cent. 

Date    Inflows    Outflows    Inflow/Outflow (Net)
Nov-09   3794   4903   -1109
Oct-09   4261   6384   -2123
Sep-09   4189   5945   -1756
Aug-09   4036   4178   -142
Jul-09   8737   4505   4232
Jun-09   5542   4049   1493
May-09   5609   3706   1903
Apr-09   1836   2032   -196
Mar-09   1549   1552   -3
Feb-09   1565   1422   143
Jan-09   1412   1750   -338
Dec-08   1535   2073   -538
Nov-08   1386   1520   -134
Oct-08   1965   2671   -706
Sep-08   2885   2281   604
Aug-08   2183   2415   -232
Jul-08   2538   2483   55
Jun-08   3764   2631   1133
May-08   4557   3582   975
Apr-08   4142   4045   97
Mar-08   10345   5660   4685
Feb-08   10468   3712   6756
Jan-08   20253   7536   12717
 

                                                                       Figures in Rs