Rising equity markets failed to convince investors to stay put, indicate monthly numbers released by Association of Mutual Funds In India (AMFI). Investors sold equity mutual funds worth Rs 4,534 crore in month ended February 28, 2021. For the previous month, the number stood at Rs 9, 253 crore.
Among equity funds, flexi cap funds lost Rs 4,497 crore in February 2021 compared to net redemptions of Rs 5,933 crore in January 2021. This category saw the highest redemptions across equity fund categories.
Equity linked savings schemes (ELSS) – popularly known as tax saving funds saw net redemptions of Rs 847 crore as compared to Rs 820 crore in previous months. “We may see net inflows in the tax saving schemes in next month, as more investors opt to save their taxes in March,” said N. S. Venkatesh, chief executive, AMFI.
“Investors opted to book profits as markets scaled new high. Some investors are redeeming their investments in mutual funds and investing directly in stocks,” said Anup Bhaiya, founder of Mumbai based Money Honey Financial Services.
Systematic investments plans which are used by many individual investors as preferred means of investments in mutual fund schemes continue to see inflows. However the contribution dipped to Rs 7,528 crore in February as compared to Rs 8023 crore in January 2021.
Number of SIP accounts outstanding stood at 3.62 crore in February as compared to 3.54 crore in January.
Balanced advantage funds saw net investments of Rs 2005 crore compared to Rs 658 crore in January. This along with other categories, ensured that the hybrid funds which invest in varying mix of equity, debt and gold saw inflows of Rs 4702 crore in February 2021 compared to 2141 crore in January.
Bond schemes have seen net inflows of Rs 1,734 crore. Short duration funds and corporate bond funds saw net redemptions of Rs 10,286 crore and Rs 6,751 crore respectively, in February. In the previous months, these categories saw net inflows of Rs 6,892 crore and Rs 5,428 crore, respectively. The redemptions in bond funds are attributed to the rising yields. Rising bond yields lead to fall in bond prices and also pulls down net asset values of bond funds.
Gold ETFs continue to see net investments in February, though at a slower pace. Investors invested Rs 491 crore compared to Rs 624 crore in January.
Total assets under management for the mutual fund industry stood at Rs 32.29 lakh crore as on February 28, 2021, compared to Rs 31.84 lakh crore as on January 31, 2021.