Outflow from equity and equity-linked open ended schemes was at ₹9,253 crore in January compared to ₹10,147 crore in December.
Even though Indian stock markets continue to register new highs, equity mutual funds witnessed an outflow of ₹9,253 crore in January, making it the seventh consecutive monthly withdrawal. However, pace of withdrawal has slowed down over past three months.
As per the data, outflow from equity and equity-linked open ended schemes was at ₹9,253 crore in January compared to ₹10,147 crore in December. Overall, equity schemes had witnessed an outflow of ₹12,917 crore in November, ₹2,725 crore in October, ₹734 crore in September, ₹4,000 crore in August and ₹2,480 crore in July, which was their first withdrawal in over four years.
Contribution of systematic investment plans (SIPs) dropped to ₹8,023 crore last month from ₹8,418 crore in December.
"Redemptions for seven months in a row, when the markets are rising steadily, is a bit perplexing and unhealthy," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"Redemptions peaked in November when the market rose sharply. Profit booking is fine, but huge redemptions on expectations that the market would correct is a wrong investment strategy," he added.
"Sectoral rotations are happening and likely to accelerate, going forward. Pharma was a darling of the market in 2020 when the pandemic was raging. This year economy facing segments like banking, autos, cement, metals and capital goods are likely to do well. IT, of course, are on a strong wicket."
Overall, the mutual fund industry witnessed a net outflow of ₹35,586 crore across all segments during the period under review, compared to ₹2,968 crore inflow seen in December on investment from hybrid and other schemes.
"The continuation of net outflows from equity funds could be attributed to profit booking/portfolio rebalancing as markets continue to touch new highs," Himanshu Srivastava, Associate Director – Manager Research, Morningstar India said.
Within the debt schemes, liquid funds logged maximum outflow to the tune of ₹45,316 crore. Besides, low duration funds saw outflow of ₹8,041 crore.
However, investors infused ₹2,142 crore in hybrid schemes. Apart from this, Gold exchange traded funds (ETFs) witnessed an inflow of ₹625 crore last month, higher than ₹431 crore seen in December. (With PTI inputs)