Equity mutual funds register a net outflow of Rs160 crore in April, as sales fail to pick up, while outflows continue
Equity mutual funds continued to face redemption pressures in April as the market indices—Sensex and Nifty, continue to rally ferociously upwards. Though both redemptions and purchases of equity mutual funds were lower compared to March, higher redemptions led to a net outflow of Rs160 crore. Sales of equity mutual funds totalled Rs5,621 core, higher than the average of the past 12 months of Rs3,841 crore. Redemptions too, were above average. Redemptions in March equalled Rs5,781 crore, as compared to the past 12-month average of Rs4,613 crore. Over the past 12 months, equity mutual funds reported a net inflow in as many as six months. Over the past one year, as much as Rs9,157 crore has flowed out of equity mutual funds.
With the heavy outflows, equity assets under management (AUM) have reported a lower growth compared to that of the market. While the Sensex may have moved up by 15% to 22,417 from 19,504 over the one-year period ended 30 April 2014, equity AUM has grown by just 6.56% over this period. Only one new fund offer (NFO) was launched in April, bringing in Rs64 crore.
After several months of reporting a decline in equity folios, in April, the number of folios increased by 0.39 million or 1.32% to 29.57 million. Unfortunately, the increase in folios has been marginal and not sufficient enough to offset the huge decline in folios over the past year. Over the year ended 30 April 2014, mutual fund folios declined by 10% or 3.34 million folios.
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