While net inflows
into MF schemes
have been strong this year, there are also a set of investors
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. Equity schemes
have seen inflows
of over Rs 86,000 crore this year.
However, a decline in gross redemptions as a percentage of net inflows
is a positive.
In January, the redemption-to-inflows
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 funds
report net flows of Rs 12,727 crore. However, on an absolute basis, the gross redemption figure
hasn’t seen a sharp decline. So, net inflows
are supported by high gross sales, indicating that investors
are actively reshuffling their portfolios.
According to industry players, this is a healthy sign as money
is not moving out of the system. They expect strong inflows
into equity MFs
to sustain. Chandan Kishore Kant
decodes the numbers:
Illustration: Ajay Mohanty