The calendar year 2013 has been another tough year for the mutual fund industry, with respect to attracting investment into equity schemes. Equity outflows in the year seem set to cross the R10,000-crore mark, the second year in a row.
In CY13, outflows in equity schemes totalled R9,767 crore till November, data from industry body Amfi show. This is a worrying trend for an industry that saw outflows to the tune of R14,148 crore in CY12. The outflows for the overall equity category in CY13 nudge up to R11,283 crore if figures for ELSS outflows of R1,516 crore till November are included.
During the year, equity MF schemes have seen outflows for seven of the 11 months. The highest monthly outflows in CY13 was posted in October (R3,225 crore). Months of May (R2,910 crore), January (R2,501 crore) and September (R2,116 crore) saw significant outflows.
Outflows have been high even in the months when the markets ran-up significantly. For instance, September and October together saw a total outflow of over R5,000 crore in a period when the Indian equities rose 13.7%. According to experts, several investors used the rally during this period to cut losses or book small profits and exit the market. Indian equities have gained over 8.2% in the year to date.
?We have seen quite a few relief rallies during the year and long-term investors who have been sitting on losses have been happy to exit during every market upmove,? said Debasish Mallick, managing director & CEO, IDBI Asset Management.
Equity assets as a percentage of overall MF assets have fallen 5% to 17% at the end of November from 22% in December 2012. Apart from outflows, the industry has also seen equity folio closures of 37.38 lakh this year, highlighting the dwindling faith of investors in equity as an asset class.