Equity funds witnessed their highest redemptions in a single month with September seeing an outflows from equity schemes of over Rs 7,000 crore. Redemptions were also seen in income, money market and ELSS schemes as mutual fund industry witnessed total redemption of Rs 71,800 crore in September, according to Association of Mutual Funds in India (Amfi) data.
Arindam Ghosh, CEO of Mirae Asset MF, said, "Surge in equity markets have led equity investors to book profits and invest in other asset classes." Fund managers are sitting on cash waiting for the right opportunity to enter the market, he added. In September, Indian equity markets rose by over 11%.
This is the fourth straight month of redemption for equity schemes. Since the market regulator banned entry loads in August last year, equity schemes has seen net redemption of over Rs 21,400 crore. There has been net equity inflows only in the three months since August 2009. In September, outflows in income schemes stood at Rs 28,637 crore, money market schemes (Rs 36,100 crore), ELSS equity funds (Rs 270 crore), and balanced schemes (Rs 414 crore).
A senior official said, "Apart from booking profits, some investors are exiting schemes which are underperforming. With several gold ETF being launched, many investors are also looking to diversify their portfolio and investing in gold ETF."
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'I made my money by selling too soon.'
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