NEW DELHI: Equity mutual funds investors withdrew even more money in August as investors preferred to book profits instead of staying invested following signs of fading market exuberance.
Amfi data released for the month of August said investors withdrew a net Rs 3,999.62 crore from equity-oriented funds thanks to a selloff in almost all categories. Equity mutual funds saw a total inflow of Rs 14,558.20 crore and outflow of Rs 18,557.82 crore.
This is the fifth straight month of fall in inflows in the equity mutual funds.
Outflows and an opportunity to book profits in overvalued stocks forced domestic institutional investors, which mostly comprise mutual fund managers, to sell stocks worth Rs 11,045.78 crore in August, more than Rs 10,008 crore in the previous months. This is at the time when FIIs have been pouring a huge chunk of money in Indian stock markets.
Debt mutual fund schemes were also under redemption pressure, with a net outflow of Rs 3,907.53 crore. The outflows have come at a time when debt fund NAVs have seen a drop amid rising yield.
Net asset value (NAV) of debt funds grows when bond prices rise, and an uptick in bond price occurs when yields fall.
Liquid funds and overnight funds saw the biggest outflow among all categories. Investors withdrew Rs 15,814.01 crore from liquid funds and Rs 10,298.03 from overnight funds in August. Gilt funds and medium to long-duration funds also saw some outflow.
Total AUM of the mutual fund industry dipped Rs 14,553.11 crore to Rs 27.49 lakh crore. A part of the loss also reflects mark-to-market losses for the industry.