Mutual fund investors continued to redeem money from equity MFs for the sixth straight month in December as the markets touched new highs. However, inflows through systematic investments plans (SIPs) remained strong despite net outflows from equity schemes.
Data from the Association of Mutual funds in India (Amfi) show that equity-oriented schemes saw net outflows of Rs 10,147.12 crore, with all the 10 categories witnessing redemptions. Overall, the MF industry saw net inflows of Rs 2,967.86 crore in December, while net AUM as on December was at Rs 31.02 lakh crore.
Amfi data indicate that fund mobilised by equity schemes were Rs 26,073.16 crore in December, while redemptions were of `36,220.28 crore. Market participants say investors are booking profits as equity markets touch new highs. In December, the Sensex and Nifty were up by 8.2% and 7.8%, respectively.
NS Venkatesh, chief executive at Amfi, says, “Equity markets have touched all time high and investors are booking profits. I think if markets continue to do well, we might see investors continue to book profits.” Between July and December, equity MFs witnessed net outflows of nearly Rs 33,000 crore. In November, equity schemes had seen outflows of Rs 12,917.36 crore.
The inflow in SIPs was Rs 8,418.11 crore in December, compared with Rs 7,302.16 crore in November. Officials at Amfi said around Rs 500 crore of SIPs due in November were adjusted in December as the last three days of November were non-business days.
Market participants also say that some of the money is even moving from equity mutual funds to direct equity. “Re-allocation of large part of these redemptions would be in direct equities where the experience of investors have been good in recent past, alongside demand for IPOs and real estate would also have sucked up the liquidity,” said Akhil Chaturvedi, associate director and head of sales, Motilal Oswal Asset Management Company.
Open-ended debt-oriented schemes saw net inflows of Rs 13,682.77 lakh crore in December. Officials in the industry say that there is flight to safety towards debt funds as investors are uncertain about the current rally in the equity markets.