Huge redemption in MF debt schemes; equity funds hold fort
Investors kept pumping in money into stocks through MFs when the bourses were reeling under the US subprime crisis.
By PTI |
MUMBAI: Investors kept pumping in money into stocks through mutual funds at a time when the stock market was reeling under the impact of the US subprime crisis, although they pulled out over Rs 24,000 crore from debt funds last month.
The Indian mutual fund industry saw a net outflow of about Rs 17,900 crore in August, but the redemption was seen mainly in money market schemes and exchange traded funds (ETFs). The equity funds recorded an inflow of close to Rs 8,000 crore, according to data available with Association of Mutual Funds in India.
"In August, banks saw better opportunities in the money market and therefore moved from liquid funds to direct investments. This could have accounted for the net outflow," JP Morgan Asset Management CEO Krishanamurthy Vijayan told the media.
"Quality equity diversified funds did see inflows, and this was largely on account of the fact that many investors saw volatility as a buying opportunity. Good quality open- ended funds have been seeing this trend and is a heartening sign of the maturing of the investor," Vijayan said.
Besides debt oriented funds, the ETF and Gold ETFs also saw redemptions worth over Rs 1,500 crore.
"The redemption in banking ETFs have been mainly because of the pulling out of large investors like FIIs which have been net sellers in the August," mutual fund tracking firm ValueResearch Online CEO Dhirendra Kumar said.
The ETFs are open-ended funds that are designed to track specific indices and trade just like any other stock, combined with the benefits of a mutual fund.
The Indian mutual fund industry saw a net outflow of about Rs 17,900 crore in August, but the redemption was seen mainly in money market schemes and exchange traded funds (ETFs). The equity funds recorded an inflow of close to Rs 8,000 crore, according to data available with Association of Mutual Funds in India.
"In August, banks saw better opportunities in the money market and therefore moved from liquid funds to direct investments. This could have accounted for the net outflow," JP Morgan Asset Management CEO Krishanamurthy Vijayan told the media.
"Quality equity diversified funds did see inflows, and this was largely on account of the fact that many investors saw volatility as a buying opportunity. Good quality open- ended funds have been seeing this trend and is a heartening sign of the maturing of the investor," Vijayan said.
Besides debt oriented funds, the ETF and Gold ETFs also saw redemptions worth over Rs 1,500 crore.
"The redemption in banking ETFs have been mainly because of the pulling out of large investors like FIIs which have been net sellers in the August," mutual fund tracking firm ValueResearch Online CEO Dhirendra Kumar said.
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The ETFs are open-ended funds that are designed to track specific indices and trade just like any other stock, combined with the benefits of a mutual fund.
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