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TRENDING TOPICS:#Manmohan Singh#Telangana#Arvind Kejriwal#Michael Schumacher#AAP#2013 roundup Main menu HomeNewsBusiness/TechCrimeCurrent AffairsPoliticsWorldStatesAndhra PradeshTamil NaduKarnatakaKeralaInterviewsEntertainmentBollywoodHollywoodKollywoodMollywoodSandalwoodTollywoodTV/MusicMovie ReviewsSportsCricketFootballOther SportsTennisMotor SportsLifestyleHealth & Well beingRelationshipsFashion/BeautyFoodTravelBooks/ ArtPets/EnvironmentOffbeatCommentaryGalleriesAstroguideMatrimonialSpecials2013 Year EnderUttarakhand flash floodsDC 75 YearsDC 75 - User Contributionskarnataka polls100 Years of cinemaIPL 2013Newswrapmore You are hereHome » News » Business/TechInvestors pull out of mutual funds Mumbai: The domestic mutual fund industry signed off 2013 with massive outflow from equity schemes as high bouts of volatility in the secondary market forced many investors to exit the market.
According to the data available with the Association of Mutual Funds of India (AMFI) till November 2013, the industry witnessed a total outflow of Rs 9,767 crore from equity schemes, its second consecutive year of outflows. In 2012, equity schemes had seen an outflow of Rs 14,148 crore.
“Individuals who had invested between 2005 and 2007 exited the market either by cutting losses or by booking small profits as the net asset value of many mutual fund schemes were trading below their par value,” commented Jaideep Bhattacharya, managing director, Baroda Pioneer AMC.
Bhattacharya however pointed out that the redemption money largely remained within the system as investors migrated towards money markets and fixed income schemes offered by fund houses after cutting their exposure in equities.
In 2013, equity schemes saw outflows for seven out of 11 months with October witnessing the highest amount of redemption worth Rs 3,225 crore. The proportion of equity assets in the total assets under management (AUM) of the industry have fallen 5 per cent to 17 per cent as on end November, 2013 from 22 per cent as reported in December 2012. Additionally, the industry has also seen closure of equity folios numbering 37.38 lakh in 2013.
“Though the Sensex and Nifty have scaled new highs, the broader markets haven’t moved much. While these are the best times to build a portfolio by investing through systematic investment plans (SIP), the risk appetite of investors have taken a hit because of adverse secondary market conditions,” said, Deepak Chatterjee, former managing director, SBI MF.
On an optimistic note, Bhattacharya said that 2014 would see the re-emergence of the equity investors. “While there would be continued interest in the debt market mutual fund schemes, we are also expecting fresh investment coming into equity schemes,” he said.
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