Equity mutual funds witnessed the highest ever monthly outflow in November at Rs 12,971 crore, the fifth straight month of withdrawals. The total outflow in the last five months stands at Rs 22,910 crore as investors booked profits with the market at record highs.
"The strong performance of the equity markets in November seems to have encouraged more investors to book profits and move to short-term investments. We still believe that there is a significant amount of money that can come back to the market in the event of any correction. The medium to long-term potential of the equity markets remains strong," G Pradeepkumar, CEO at Union AMC told Moneycontrol.
The benchmark indices have rallied more than 70 percent from the low of March 23 till November and extended gains to 82 percent in December, so far. The broader markets also participated in the upward journey as the Nifty midcap climbed 88 percent and smallcap 105 percent from March.
Mutual funds in November made fresh buying into six gold exchange traded funds (ETF)— Axis Gold ETF, Birla Sun Life Gold ETF, HDFC Gold Exchange Traded Fund, Kotak Gold Exchange Traded Fund, Nippon India ETF Gold BEES, SBI Gold Exchange Traded Scheme and UTI Gold Exchange Traded Fund, Dolat Capital said in a note.
The asset management companies also made fresh entry into four stocks—Gland Pharma, Kirloskar Industries, Marksans Pharma and Shreno, the brokerage added. Twenty-one mutual funds acquired shares in Gland Pharma through its initial public offering that was launched in November.
On the other hand, mutual funds exited 29 stocks including Apollo Micro Systems, Asian Granito India, Balaji Telefilms, Salzer Electronics, Shakti Pumps, Take Solutions and Themis Medicare, said Dolat Capital. Most of these scrips are from the smallcap segment.
In the Nifty50, the highest buying by AMCs was seen in Adani Ports, Coal India, Dr Reddy's Labs, Grasim, IOC, Maruti Suzuki and UPL. The highest-selling by mutual funds was seen in Asian Paints, Axis Bank, Bajaj Finance, Bajaj Finserv, Cipla, Britannia Industries, GAIL, NTPC, Power Grid, TCS and Tech Mahindra.
The money flow through systematic investment plans (SIPs) also dropped to Rs 7,302 crore in November from Rs 7,800 crore in the previous month, which experts feel could be due to the long weekend towards the end of November.
"SIP numbers have remained robust, which is a good indication of continued retail interest. It must be kept in mind that since the last three days of November were non-business days, a significant amount of SIP flows might not be reflected in the official numbers that have been released," G Pradeepkumar said.
Foreign institutional investors, however, kept at it and the inflow was the highest for a single month in November, as they invested Rs 70,845 crore in equities. December, so far, has already seen half of the November flow.