At Rs 4,000 cr, equity MF outflows in August highest since Mar ’16

Mumbai: Equity mutual funds saw highest monthly outflows in four-and-a-half years in August as investors uncertain about the near-term market prospects continued to redeem from these products. These schemes saw net redemptions to the tune of ₹4,000 crore in August after ₹2,480 crore in July 2020. Debt schemes saw outflows worth ₹3,908 crore, mainly from liquid and overnight funds.“Investor confidence is low due to Covid-19. After seeing the sharp rise in their equity mutual fund portfolios from the March lows, there is a tendency to book profits and wait before redeploying,” said DP Singh, chief business officer, SBI Mutual Fund.Assets under management (AUM) of equity schemes rose to ₹7.67 lakh crore from ₹7.29 lakh crore, thanks to the continued strength in the market.Distributors said investors are not convinced about the longevity of the current rally because of the economic slowdown. Some of them are preferring to hold cash at the moment. All equity scheme categories saw outflows in August.Flows into mutual funds through systematic investment plans (SIPs), however, remained mostly resilient. SIP flows, which are mostly from retail investors in equity-linked schemes, dipped to ₹7,792 crore in August from ₹7,831 crore in July.“In such a challenging economic environment, retail investors tend to reduce their SIP investments and reduce risk on their portfolios by selling equity MFs,” said Jean Christophe Gougeon, director — investment solutions, Sharekhan by BNP Paribas.78025992Total AUM of the mutual fund industry grew to ₹27.78 lakh crore from ₹27.28 lakh crore.Mutual fund schemes which invest in international assets and gold saw inflows of ₹322 crore and ₹908 crore, respectively. Hybrid schemes that invest in a mix of debt and equity saw outflows of ₹4,819 crore.

from Economic Times https://bit.ly/3ifUfLB
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