Data for redemptions and new sales of mutual funds are now available for October.
Total redemptions amounted to Rs3.86 trillion during the month, well below the previous month’s redemptions of Rs4.89 trillion. In July and August, too, redemptions were higher than in October.
The impact of the credit crunch can be seen from the net outflows from income. During October, net outflows from income funds were Rs52,820 crore, on top of Rs26,665 crore worth of net outflows in September.
The only other month in this fiscal year that saw an outflow in income funds was during June.
Rather surprisingly, in view of the hullabaloo about liquid funds, there were actually net inflows into these in October amounting to Rs3,256 crore, compared with a net outflow of Rs19,675 crore in September.
This net inflow in October was more than that in July, while liquid funds had seen a modest net outflow in August.
Also See: Rising Outflows (Graphic)
Despite the carnage in the stock markets, however, there have been remarkably little redemptions from equity mutual funds.
In October, net outflows from equity funds totalled Rs706 crore, compared with an inflow of Rs604 crore in the previous month.
In October, fresh inflows into equity funds were Rs1,965 crore, while outflows were Rs2,671 crore.
October also saw a net withdrawal from gold exchange traded funds (ETFs) for the first time this fiscal as investors realized the contrarian gold call was not paying dividends.
But volumes in gold ETFs continue to be low. Gilt funds, on the other hand, saw a lot of inflows during October, probably on account of investors betting on further interest rate cuts by the Reserve Bank of India.
But October has been the worst month so far in the year that began in April in terms of net outflows from funds.
The large net outflows in September and October reflect the credit crunch.