Mutual funds investors cash in on rally, book profit

Mumbai: The equity schemes offered by mutual funds witnessed net outflow of funds in March, for the first time in the last two years as investors chose to book profit amidst a strong rally in the domestic bourses.

The pure equity schemes witnessed a net outflow of Rs 3,206 crore in March while equity linked savings schemes (ELSS) witnessed a net inflow of Rs 1,836 crore according to the latest data released by Association of Mutual Funds in India (AMFI).   

However, on a yearly basis, the industry witnessed net inflow of Rs 67,611 crore in equity schemes, slightly less than Rs 68,121 crores of inflows reported in financial year 2014-15.

“Retail investors have shown a lot of patience and had stayed invested in their schemes with a long-term horizon. Some amount of money would also have been pulled out by corporates and other institutions as part of balancing their books before the end of the fiscal,” said Dinesh Khara, managing director, SBI MF.

Looking ahead, Mr Khara said things are looking quite positive for the equity markets after the Reserve Bank of India (RBI) announced series of measures to infuse liquidity into the system. “RBI was able to address the issue of liquidity. I believe, the market would also benefit out of it,” he said.

In March, the equity markets also witnessed fund houses offloading shares worth Rs 10,198.10 crore at a time when foreign portfolio investors (FPI) pumped in a massive Rs 21,143 crore, their biggest monthly purchase since March 2013.

Despite a rally in gold prices in the international markets, investors shied away from Gold Exchange Traded Funds (ETFs). In March, Gold ETFs witnessed an outflow of Rs 105 crore taking their total redemptions in FY16 to Rs 903 crore.

While this is the third consecutive year of outflows for Gold ETFs, the pace of redemptions have slowed down as compared to the preceding two years. In FY15, the outflow from Gold ETFs stood at Rs 1,475 crore.