Equity investors cashed out of Mutual Funds as Sensex soared 25%
the market is still some distance away from that peak, but the rally has done enough to make investors press the exit button. “Investors are now relieved that they can exit with their capital intact,” said Naval Bir Kumar, vice chairman, IDFC MF.
The volatility in the market and the absence of a clear directional trend also dented retail investors’ confidence. For instance, while the year began well with the Sensex touching a high of 18,428 points on February 22, it fell to the year’s low of 15,948 points on May 23, before regaining steam in September and touching a 19-month high in December. “Investors seem to have run out of patience. The industry has concentrated on increasing the number of SIPs this year but it has not been able to arrest the quantum of outflows in equity schemes,” said Sarath Sarma, executive director, IDBI Asset Management.
Investors also migrated to debt products. While the early part of the year saw significant inflows into fixed maturity products, dynamic bond funds saw major inflows after March. “Large inflows have come into income funds and duration bond funds,” said Chatterji. Most of the debt funds categories, including liquid funds, ultra short-term income funds and medium and long-term gilt funds, have given average category returns over 9% this year. The assets of a universe of 18 dynamic bond funds have swelled by nearly 400% in past one year, according to Morningstar India.
That explains why the overall assets under management (AUM) of the
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