Equity mutual funds schemes saw outflows to the tune of R2,910 crore in May,the most in the last eight months,according to data from mutual fund (MF) industry body AMFI. The outflows were seen in a month when the BSE Sensex rose more than 1.3%. MF equity schemes have seen inflows in only 14 months after the entry load was done away with in August 2009.
There is bound to be some amount of outflows when the market goes up,primarily because long-term investors,who have not seen enough returns in equity funds,will look to exit each time the market rallies, said Debasish Mallick,MD & CEO,IDBI Asset Management. The trend will continue unless we see a consistent uptick in the market.
The average month-end assets under management (AUM) of the mutual fund industry rose 5.2% to R8.68 lakh crore in May from R8.25 lakh crore in the previous month,primarily led by inflows into income and liquid/money market schemes.
Liquid/Money Market schemes saw inflows of R20,697 crore in May compared with R85,745 crore of inflows in April. Assets of liquid funds rose 11% to R2.05 lakh crore in May from R1.84 lakh crore in the previous month,led by a surge in inflows.
Income funds saw inflows of R20,919 in May similar to the inflows of R20,159 crore seen in April. The month-end assets for the category rose to R4.47 lakh crore,the highest month-end assets for the category in the past 35 months. According to experts,long-term debt funds have seen an increase in interest on hopes of a decline in key interest rates.
Gold ETFs witnessed inflows of R5 crore in May compared with outflows of R36 crore in the previous month.
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