Total monthly redemptions from equity mutual funds continue to be higher than inflows as August witnessed another net outflow of Rs 2,890 crore from these funds. However, overall the mutual fund industry reported a net inflow of Rs 36,185 crore on account of higher inflows than outflows into debt funds.
According to mutual fund experts, many investors, who were stuck in the market for the past two-three years and waiting for net asset values (NAVs) to touch levels at which they can book profit, are redeeming their investments in equity funds. Equity markets in India touched their highest level in January 2008 and then dropped sharply by more than 60 per cent within a year, eroding the value of all lump sum investments.
Gross inflows into diversified equity funds in August were Rs 4,928 crore, while outflows were to the tune of Rs 7,000 crore. Tax saving funds, which are also diversified equity funds with three-year lock-in, also witnessed net outflows of Rs 127 crore.
In debt category, liquid and money market funds witnessed net inflows of Rs 22,000 crore, while income funds saw net inflows of Rs 16,500 crore. Income funds and liquid & money market funds together account for 67 per cent of the industry asset under management (AUM). However, retail participation in these funds remains negligible.
In other categories, gold exchange-traded funds saw net inflows of Rs 514 crore, while balanced funds saw net inflows of around Rs 400 crore.
Meanwhile, the month-end AUM of the industry grew 6 per cent in August to Rs 7,09,666 crore compared with Rs 6,68,605 crore in July.
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