Equity funds saw outflows of R456 crore in January against R360 crore of inflows in December, 2011, data from mutual fund industry body Amfi show. The outflow come at time when the Sensex has gained more than 11%, its highest gain for the month in 18 years. According to market watchers, the sharp pullback in stock prices has prompted several investors to exit their investments. In 2011, the Sensex lost some 25% after hitting a lifetime high in November 2010.
In the two and a half years or so since August 2009, when entry loads were withdrawn by the capital market regulator, equity schemes have seen inflows in only twelve months.
Income funds saw net outflows of R2,926 crore in January in continuation with the outflows of over R15,000 crore seen in December. Balanced funds, which have a small equity component, saw outflows of R101 crore. Liquid/money market saw significant net inflows of R26,429 crore compared with net outflows of over R48,000 crore in December. The overall inflows into all the schemes put together amounted to R23,553 crore. Significant inflows were also seen in Gilt schemes which attracted R521 crore.
Currently there are 44 fund houses in the country with total assets worth over R7 lakh crore, according Amfi data. Most of the smaller players are struggling to survive in the current environment of weak stock markets. Of the AUM, only less than R2 lakh crore are accounted for by equity schemes. In August 2009, Sebi had banned entry loads of 2.25%, paid to distributors, which resulted in a large number of distributors giving up the business.