Long-term schemes see redemptions worth Rs 3,045 crore in September

Our Markets Bureau

New Delhi, Oct 15: Panic-stricken investors have pulled out Rs 3,045 crore from long-term income schemes during the month of September. While these funds saw massive net redemptions during the month, liquid funds could attract only a part of this money. The cash funds have attracted a net inflow to the tune of Rs 755 crore during the last month, according to the figures of the Association of Mutual Funds in India (Amfi).

The huge net outflow of Rs 3,045 crore during September 2001 is against a massive net inflow of Rs 1,386 crore in August 2001. These funds were attracting huge inflows since September last year. The investor fancy for these funds was justified as they were giving returns of over 20 per cent.

However, the terrorist attacks in the US have changed the investor perceptions. The returns for hese funds hit the negative territory in September for the first time in 14 months. These funds gave a negative annualised monthly return of 2.65 per cent in September 2001 compared to positive 16.55 per cent in August. Income funds gave a negative annualised monthly return of 2.88 per cent way back in July 2000 after the Reserve Bank cut the cash reserve ratio (CRR) and bank rate each by 100 basis points in the same month.

In September, 85 open-ended income funds mobilised Rs 2,702 crore and closed-ended schemes raised Rs 81 crore. In comparison, in August, these funds mobilised Rs 3,588 crore. However, the total redemption in the schemes touched a high of Rs 5,828 crore in September compared to Rs 2,202 crore in August. In line with the huge redemptions in these debt schemes, the assets under management (AUM) plunged by Rs 4,841 crore in September. The AUM has fallen from Rs 56,200 crore as on August 31 to Rs 51,359 crore as on September 30.