AMFI data: As markets rally, investors exit equity funds, prefer debt schemes

Investors continued to redeem from their equity mutual fund holdings in November. Equity funds witnessed net redemptions worth Rs 12,917 crore in November 2020, compared to Rs 2,724 crore in October 2020. Hybrid schemes – which invest in stocks, bond and gold in varied proportions – also saw net exit of Rs 5,249 crore compared to Rs 1,681 crore in the previous month.

SIP accounts steady

During November 2020, the number of systematic investment plan (SIP) accounts grew to 3.4 crore from 3.37 crore in October. Monthly SIP contribution in November fell to Rs 7,302 crore compared to Rs 7,800 crore in October, according to data released by the Association of Mutual Funds in India (AMFI). Total assets under management for the mutual fund industry stood at Rs 30 lakh crore as on November 30, 2020, compared to Rs 28.22 lakh crore, as on October 31, 2020.

Bond funds continue to see robust investor interest in the current low interest rate environment. All debt fund categories put together saw net inflows of Rs 44,983 crore in November. Low duration, short term and corporate bond funds saw net inflows of Rs 27,107 crore, Rs 13,093 crore and Rs 11,093 crore, respectively in November. Investor interest appears to be on the higher side with respect to short-term debt funds.

Outflows continued from credit risk funds, with Rs 15.39 crore going out of such schemes in November. This is the lowest number recorded in this year.

Large-cap and multi cap funds saw net outflows of Rs 3289 crore and Rs 2842 crore, respectively. All equity fund categories witnessed investors  redeeming their investments. “Investors are booking profits as stock markets rally,” says N S Venkatesh, chief executive, AMFI.

As the equity markets witnessed a broad-based rally, equity mutual funds saw their NAVs rising in line with the surging stock prices. While large-cap and multi-cap funds delivered 10.78 percent and 11.26 percent, respectively, since the beginning of CY2020, mid and small-cap schemes gave 20.84 percent and 25.99 percent, respectively, according to Value Research.

Gold ETFs saw net outflows of Rs 141 crore, compared to net inflow of Rs 384 crore in previous month. Gold ETFs have corrected 5.7 percent in the last one month due to weak gold prices.