Equity redemptions slow down as markets slide

Equity mutual fund redemptions decelerate in February as S&P BSE Sensex dips more than 1000 points.  

Equity mutual fund net outflows slowed down to Rs 128 crore in February as against Rs 2501 crore in January as the S&P BSE Sensex declined 5% during the same period, shows the latest AMFI data.  

Against a gross sales of Rs 3375 crore, gross redemptions stood at Rs 3503 crore which resulted in a net outflow of Rs 128 crore in equity funds. Assets under management in equity funds dipped 7% to Rs 1.52 lakh crore from Rs 1.65 lakh crore in January on account of mark to market losses.

In February, the mutual fund industry received year to date (April – February) net inflows of Rs 1.84 lakh crore on account of robust inflows in income and liquid funds. The net inflows in February dipped to Rs 3584 crore as against a whopping Rs 60732 crore net inflow in January.

New fund offers, mostly income schemes, collected Rs 10,935 crore in February.

Gold ETFs recorded net outflow of Rs 8 crore. According to CRISIL, the CRISIL World Gold Index fell 4% in February due to weak global trend for gold following increase in risk appetite. As a result, Gold ETF AUM also fell from Rs12000 crore levels in January to Rs 11559 crore in February.

Gross sales in ELSS stood at Rs 338 crore while gross redemptions were to the tune of Rs 373 crore, resulting in a net outflow of Rs 35 crore in February. Gilt funds continue to gain traction in anticipation of further rate cuts by RBI. RBI will announce its monetary policy rates on March 19. Investors pumped in Rs 446 crore in gilt funds in February, taking the YTD inflows to Rs 4143 crore.

The assets under management of the industry fell 2% to Rs 8.13 lakh crore in January after reaching all-time high of Rs 8.20 lakh crore in January.