ELSS see huge redemption

It's just not investors in diversified equity mutual fund (MFs) who have reaped the benefit of the buoyancy in markets. Equity linked savings schemes (ELSS) investors too have joined the party pulling out Rs 1083 crore in August-October alone, 127.4% higher than the same period the previous year.

The redemptions in ELSS  have been more than twice that of the year ago period in three out of the past four months, data with the Association of Mutual Funds in india (AMFI) shows. Investor pull-outs are usually in the region of Rs 110 crore-150 crore a month in ELSS but have been hovering over Rs 300 crore since July and as a result the category has seen net outflows of Rs 931 crore so far in the year, AMFI data shows. In fact, investors took out a whopping Rs 446 crore from the category in September when redemptions from diversified equity funds touched Rs 12,804 crore, an all-time high.

Interestingly, the pace of redemptions in ELSS has been even faster than that of diversified equity MFs, which have seen record pull-outs in the past few months as the markets remained on a strong wicket.

"A large number of retail investors (in ELSS) have booked profits," said Jaideep Bhattacharya, chief marketing officer, UTI MF. Fund houses mobilised huge amounts of money from retail investors under ELSS in 2006-07. With many schemes turning the corner after the good run by the markets in recent months, investors are making an exit, industry officials said.

Source: http://timesofindia.indiatimes.com/business/india-business/ELSS-see-huge-redemption/articleshow/6917790.cms

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