Equity-linked funds see erosion in July

Our Markets Bureau

New Delhi, Aug 24: THE equity-related funds like growth schemes, balanced and equity-linked saving schemes (ELSS) together have witnessed a massive erosion of Rs 1,468 crore in corpus during the month of July.

The sharp reduction in their assets under management (AUM) is mainly due to a crash in equity prices and redemptions in these schemes during the month, according to fund sources.

The growth schemes, balanced funds and ELSS have seen a total redemption of Rs 261 crore during the month, according to the figures released by the Association of Mutual Funds in India (Amfi). However, inflows (sales) into these schemes have reduced to a trickle at Rs 71 crore during the month.

The investors have been suffering crores of losses in equity schemes and they have been forced to hold on to their equity portfolio in the absence of an exit option.

During the month, the equity schemes (or growth schemes) have seen their assets plunge by Rs 784 crore.

The balanced schemes, which are supposed to beat stock market volatility, have also seen heavy erosion in assets, thanks to their high exposure to equity.