Equity funds see net outflows of Rs. 3,206 crore in March

Equity funds (growth) witnessed net outflows for the first time after two years in March 2016. Equity funds saw gross redemptions of Rs. 14,319 crore in March 2016 while the gross sales stood at Rs. 11,113 crore which resulted in net outflows of Rs. 3,206 crore. If we take into account inflows in ELSS, the net outflows from equity funds were Rs. 1370 crore. The last time equity funds saw net outflows was in March 2014 at Rs. 2,102 crore.

“Investors have booked profits because the market has shot up 10% in March. Profit booking coupled with low sales has resulted in negative net sales in March,” said Vinod Jain of Jain Investments. Another reason cited by industry officials for the net outflows is dividend payouts in March.

Net inflow/(outflow) and AUM as on March 31, 2016

Source: AMFI

While equity funds saw net outflows in March, the YTD net inflows stood at Rs. 67,611 crore. If we include balanced funds, ELSS and equity ETFs, the YTD inflows reached a healthy Rs. 1.02 lakh core.

Fund houses launched a slew of funds in equity and income fund categories.

There were three new ELSS NFOs - SBI Long Term Advantage Fund - Series III, Sundaram Long Term Tax Advantage Fund - Series II and UTI-Long Term Advantage Fund - Series III which collectively mopped up Rs. 322 crore. In the open end equity category, DSP BlackRock Equity Savings Fund collected Rs. 155 crore.

Fund houses launched as many as 52 close end income schemes which included more than three year tenure FMPs and capital protection funds which collectively mopped up Rs. 9,197 crore.

Barring equity ETFs, balanced funds, ELSS and infrastructure debt funds, all other categories of funds saw net outflows in March.

All in all, the industry’s AUM slipped by 2% from Rs. 12.62 lakh crore in February to Rs. 12.32 crore in March, largely due to redemptions from liquid and income funds. AMFI data shows that liquid and income funds collectively saw net outflows of Rs. 72,653 crore in March.