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Graphic: Redemption-to-inflows ratio for equity MFs drops

On an absolute basis, the gross redemption figure hasn't seen a sharp decline

Chandan Kishore Kant 

Mutual funds
Mutual funds

While net into have been strong this year, there are also a set of who have been redeeming their investments. On a year-to-date basis, gross redemptions stood at Rs 1.06 lakh crore. Part of this could be profit-taking and part of it reallocation. have seen of over Rs 86,000 crore this year.

However, a decline in gross redemptions as a percentage of net is a positive.

In January, the redemption-to-ratio stood at 72.3. This weighed on net inflows, which stood at just Rs 4,880 crore. Last month, the ratio dropped to 54.6, helping report net flows of Rs 12,727 crore. However, on an absolute basis, the hasn’t seen a sharp decline. So, net are supported by high gross sales, indicating that are actively reshuffling their portfolios.

According to industry players, this is a healthy sign as is not moving out of the system. They expect strong into equity to sustain. Chandan Kishore Kant decodes the numbers:

illustration
Illustration: Ajay Mohanty

Infographics

 

First Published: Fri, September 01 2017. 00:11 IST
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