While equity mutual fund sales continue to disappoint, redemptions fall to their lowest in 52 months, resulting in a net inflow
For just the third time in the past 12 months, equity mutual fund schemes reported a net inflow of assets. Both equity mutual fund sales and equity mutual fund redemptions have fallen to their lowest since April 2009. In that month, equity funds registered a net ouflow of Rs106 crore with sales of Rs1,994 crore and redemptions which amounted to Rs2,100 crore. In August 2013, sales which have averaged around Rs3,500 crore over the last twelve months fell to Rs2,784 crore and redemptions which averaged Rs5,000 crore declined by more than half to Rs2,326 crore. With the volatile market conditions of the last one month investors must have been confused whether it was a good time to buy or sell.
In the three months from May 2013 to July 2013 these was a decline of 11.70 lakh folios, averaging a reduction of nearly 4 lakh folios a month. In August 2013, in line with the lower redemptions, the number of folios declined by 0.63 lakh to 3.17 crore folios.
Moneylife has been continuously highlighting the decline in number of folios. This along with the continuous outflow of assets is a major concern for the industry.
Investments in equity linked savings schemes (ELSS) showed an improvement with sales in the first five months of the financial year amounting to a total of Rs683 crores compared to Rs662 crore seen in the same period last year. Other equity oriented schemes disappointed with total sales amounting to just Rs14,333 crore in the five month period compared to Rs14,940 crore seen last year.
This is despite the fact that the regulator has taken steps to improve penetration of mutual fund schemes beyond the top 15 cities and has even introduced a direct plan with a lower expense ratio for investors, who wish to skip the distributor and invest directly. While the direct plan is the preferred route for corporates investing in liquid mutual fund schemes, this route has failed to lure investors to put their money in equity schemes.
For just the third time in the past 12 months, equity mutual fund schemes reported a net inflow of assets. Both equity mutual fund sales and equity mutual fund redemptions have fallen to their lowest since April 2009. In that month, equity funds registered a net ouflow of Rs106 crore with sales of Rs1,994 crore and redemptions which amounted to Rs2,100 crore. In August 2013, sales which have averaged around Rs3,500 crore over the last twelve months fell to Rs2,784 crore and redemptions which averaged Rs5,000 crore declined by more than half to Rs2,326 crore. With the volatile market conditions of the last one month investors must have been confused whether it was a good time to buy or sell.
In the three months from May 2013 to July 2013 these was a decline of 11.70 lakh folios, averaging a reduction of nearly 4 lakh folios a month. In August 2013, in line with the lower redemptions, the number of folios declined by 0.63 lakh to 3.17 crore folios.
Moneylife has been continuously highlighting the decline in number of folios. This along with the continuous outflow of assets is a major concern for the industry.
Investments in equity linked savings schemes (ELSS) showed an improvement with sales in the first five months of the financial year amounting to a total of Rs683 crores compared to Rs662 crore seen in the same period last year. Other equity oriented schemes disappointed with total sales amounting to just Rs14,333 crore in the five month period compared to Rs14,940 crore seen last year.
This is despite the fact that the regulator has taken steps to improve penetration of mutual fund schemes beyond the top 15 cities and has even introduced a direct plan with a lower expense ratio for investors, who wish to skip the distributor and invest directly. While the direct plan is the preferred route for corporates investing in liquid mutual fund schemes, this route has failed to lure investors to put their money in equity schemes.
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