Strong performance of equity markets in November encouraged more investors to book profits.
The equity-oriented mutual funds saw net outflow for the fifth month, according to data released by Association of Mutual Funds in India (AMFI). The open-ended growth and equity-oriented schemes witnessed an outflow of Rs 12,917.30 crore in November 2020 as compared to Rs 2,724.95 crore in October 2020.
The outflows were witnessed across all the categories of equity funds. The multi-cap fund saw an outflow of Rs 2,842.08 crore, the large-cap saw an outflow of Rs 3,289.18 crore and mid-cap fund saw Rs 1,317.15 crore worth of outflow in November. Since July, equity-oriented mutual funds have witnessed a net outflow of Rs 22,500 crore.
“Equity-oriented mutual funds witnessed net outflows for the fifth month in a row, and the pace of net outflow shot up significantly from the previous month. While gross purchases (new investments) remained steady, the pace of redemptions picked up as markets made new highs. Investors looked to book some profits given the higher market valuations,” says Kaustubh Belapurkar, Director – Manager Research, Morningstar India.
Income and debt-oriented schemes witnessed an inflow of Rs 44,983.84 crore as compared to Rs 1,10,466.51 crore in October 2020. “Investors are aligning their allocation in debt schemes - more towards duration schemes and corporate bond funds to maximise their debt returns, and are booking their profits in equity funds owing to surge in equity valuations. It is also significant to note that there has been a healthy addition of 3.39 lakh systematic investment plan accounts,” says N S Venkatesh, Chief Executive, AMFI.
As per AMFI, the accommodative credit policy stance, improved economic sentiment followed by continuous global liquidity flows have led to Indian mutual fund industry’s Asset Under Management (AUM) crossing historic highs, touching the highest ever Rs 30 lakh crore landmark in November.