Equity mutual funds see Rs 937 crore net inflows in June

Gross redemptions from equity funds dropped 63% to Rs 2243 crore in June as against Rs 6002 crore in May, shows AMFI data.

Equity mutual funds received net inflows of Rs 937 crore in June on account of decline in gross redemptions, shows the latest AMFI data.The gross redemptions stood at Rs 6002 crore in May which fell to Rs 2243 crore in June.The S&P BSE Sensex fell 2% in June.

Barring equity, balanced funds and fund of funds investing overseas,all other categories of funds recorded net outflows to the tune of Rs 48403 crore in June.

Gold ETFs saw net outflows of Rs 206 crore due to profit booking and fears of decline in gold prices. The government has increased import tax on gold to stem the fall in rupee.

“Gold has seen a massive sell off of over 30% from the peaks we had seen. The trigger for the selloff was largely based on expectations of QE withdrawal by the US . In the near term, the price movement would continue to play hostage to incremental data from the US which would likely suggest the timing of possible QE exit. With expectations of interest rates going up in the US as the economy bounces back, we do not expect gold to perform like it did in the past 5 years,” said Lakshmi Iyer, Senior Vice President & Head (Fixed Income and Products), Kotak Mutual Fund.

The assets under management of gold funds reached a peak of Rs 12057 crore in January 2013 and have since declined 20% to Rs 9,612 in June 2013.

Expectations of a pause in rate cuts led investors to rush out of gilt funds which saw net outflows of Rs 332 crore.“Corporates come in and redeem from gilt funds to make quick money. Investors moved out of equity funds in May as they made some gains. June was comparatively better for the industry as redemptions fell,” said the sales head of a bank sponsored fund house.

The AUM of the industry fell 7% from Rs 8.68 lakh crore in May to Rs 8.11 lakh crore in June due to redemptions from liquid, money market and income funds.Corporates usually withdraw their investments at the end of the quarter.  New fund offers launched in June, all of which were income funds, collected Rs 2736 crore.