There has been a massive outflow in equity-oriented schemes in all categories during November, as per AMFI data. What could be the cause ?
The markets are at an all-time high and have surpassed the levels achieved pre-lockdown. This has helped most investors recoup their losses due to the deep correction we saw in March. We believe that it is an expected investor behaviour, during deep correction and subsequent reversal, to book profits and reduce their allocation to equity as an asset class. Investors will look to re-allocate across other asset classes including equity prudently and in a systematic way. We cannot ignore the deep impact of the current situation on jobs, businesses and household income. Investors will possibly wait to regain confidence in their incomes and business prospects before allocating more aggressively into equities.
