Despite heightened market volatility and series of credit events in debt market, the gross redemption in the MF industry has declined drastically.
The AMFI latest data shows that the industry’s gross redemption stood at Rs.7.73 trillion in April 2020 compared to Rs.17.75 trillion in April 2019.
If we look at recent data, the April month’s gross redemption is much lower than the recent months - Rs.10.32 trillion in January, Rs.8.84 trillion in February and Rs.15.25 trillion in March.
Experts attribute this to growing maturity of investors. Navneet Munot, CIO, SBI Mutual Fund says that investors are more evolved and are now aware of market volatility. “Distributors play a key role in overcoming behavioral biases of clients and make them understand the importance of long term investment in mutual funds. All in all, the fall in redemption can be attributed to efforts of distributors, AMCs and investor awareness campaigns done by AMFI,” he added.
The CEO of a large fund house points out that fall in redemption is due to decline in gross sales over the last few months. The industry has mobilized Rs.8.21 trillion in April 2020 as against Rs.18.74 trillion in April 2019.
Gross redemption in the last five months:
|
Month |
Redemption (trillion) |
|
December 2019 |
12.12 |
|
January 2020 |
10.32 |
|
February 2020 |
8.84 |
|
March 2020 |
15.25 |
|
April 2020 |
7.75 |
