Experts say that redemption pressure has come down but no fresh investment is coming in equity mutual funds despite markets scaling new highs.
Inspite of Indian equity markets touching new highs and every other AMC launching new equity fund, mutual fund investors are yet to find any convincing reasons to participate in market. SEBI data shows that equity mutual funds saw net outflow of Rs. 9,269 crore in FY 2013-14.
While the recent rise in markets has led investors to cash out, financial advisors say that pace of redemptions has subsided.
Typically, investors invest when the market is at its peak. But, this time, even after markets scaling new high, investors are in a wait and watch mood.
We spoke to a few experts to find out the mood of investors.
“Though the redemptions have come down, the industry is yet to see any fresh money coming in equity mutual funds,” Hemant Rustagi of Wiseinvest Advisors.
Nikhil Kothari of Etica Wealth Management seconds the view and said that industry needs a little more time to regain the confidence of investors. He says that some investors are putting in fresh money in close ended equity funds. It is evident from a decent fund mobilization in new equity schemes of close ended equity funds. AMFI data shows that such funds have mobilized Rs. 1,178 crore from their NFOs in January-March 2014.
Vishal Kapoor, General Manager – Wealth Management, Standard Chartered Bank says that many investors are in wait and watch mood. He believes that investors will come back to equity funds once the market makes some correction.
Suresh Sadagopan of Ladder7 Financial Advisories told Cafemutual that a few clients who had to repay loans have redeemed their investment after the recent rally. He, however, said that majority of his clients are continuing their investment in equity funds.
However, a few experts are of the view that investors have started putting in fresh money. Chandrasekar, Chief Executive Officer, FundsIndia says that his company is seeing some fresh investments in equity funds after the recent rally in the equity market.
What are you advising your clients? Let us know.
