Equity investors cashed out of Mutual Funds as Sensex soared 25%
industry has grown despite outflows in equity schemes. In November, the industry’s month-end AUM stood at Rs 7.93 lakh crore, the highest month-end assets for the industry since April 2010. November’s figures represent a 20% rise over the AUM garnered in January (Rs 6.59 lakh crore) and a 35% rise over the AUM of Rs 5.87 lakh crore posted in March, the lowest in the year.
According to Kumar, exits in equity schemes are unfortunate given that the market still remains fairly priced right now. “We try to educate investors that their investments are more likely to be profitable if they enter the market when things are gloomy rather than when everything is looking up. But investors have a tendency to invest when the markets have already run up substantially and look expensive,” said Kumar.
Market observers, however, believe that equity schemes might see inflows in 2013 if the current rally continues for a few more months. Sarma is hopeful that the focus on increasing SIP numbers may see some results in the coming months.
Interestingly, retail investors are not the only ones to have exited Indian equities this year. Unlike their overseas peers, domestic institutions have sold equities worth about $10 billion in the year to date.
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