Mutual fund sales continue; Remove Rs 16,306 crore from equity on profit booking in February

Mutual funds pulled out 30 16,306 crore from equities in February, making it the ninth consecutive monthly outflow as small investors registered gains amid a rally in the stock markets.

FYP research head Gopal Kavalireddy said this trend of redemption could continue until the stock market rally slows and consolidates, allowing investors to deploy their profits in long-term instruments such as mutual funds Get a chance of

In total, mutual funds pulled out a net amount of over ₹ 56,400 crore in 2020, which is available with the Securities and Exchange Board of India (SEBI).

“Whenever the market bounces after a big drop, investors exit. Investors – who had seen losses in the last two years before COVID – saw gains in the last few months and booked their profits, which resulted in mutual funds pulling out of equities, “Divam Sharma, co-founder of Green Portfolios , said.

In addition, many investors had started participating directly in the equity markets by opening their demat accounts. He said that the initial success in emerging markets and the poor performance of many mutual funds over the years has prompted him to withdraw from equity mutual funds.

In addition, valuations of many large companies have become costly, resulting in fund managers selling and increasing cash allocations, Mr. Sharma said.

According to the data, MF has been continuously withdrawing money from equity since June 2020 and has withdrawn more than ₹ 1.24 lakh crore by February.

On a month-on-month basis, MFs raised 6 16,306 crores from equity in February, 13,032 crores in January, 28 26,428 crores in December, 60 30,760 crores in November, 49 14,492 crores in October, 13 4,134 crores in September, -9,213 crores. Remove it. Crore in August, 199,195 crore in July and 612 crore in June.

However, he has invested more than ₹ 40,200 crore in the first five months of 2020 (January-May). Of this, an investment of Rs 30,285 crore was made in March last year.

The Nifty has risen 73% from its lows as of March 50, 2020, with the S&P BSE Midcap index rising 95% and the S&P BSE SmallCap index 120% over the same period.

“To increase their profit over the past year, retail investors buoyed by this antitrust rally in the stock markets have continued to capitalize on their mutual funds,” said FYERS ‘Mr. Kavalireddi.

“Due to the low mutual fund returns from earlier years, the hardship arising due to the coronovirus epidemic, and the steady incomes incapable of combating high inflation, small investors continue to withdraw their profits from most mutual fund schemes,” he said. said.

According to him, with a low interest rate and work from home concept providing the necessary time and money, retail investors have taken a keen interest in direct equity investment, which is very much from the more than 10 million demat accounts opened since the beginning of current finance. Clear years.

On the other hand, mutual funds invested ₹ 8162 crore in the debt markets in the month under review.

The upsurge in the markets, despite withdrawals from mutual funds over the past few months, has continued on a strong inflow of FPIs.

Foreign Portfolio Investors (FPIs) have invested ₹ 25,787 crore in the Indian equity markets in February after investing ₹ 19,747 crore in January and folio 1.7 lakh crore throughout 2020.