MFs' Nov equity investment at lowest since Modi took charge

Net investment in stocks declines to Rs 1,677 crore, down 72%

At a time when stock indices are trading at historical highs, Indian equity fund managers have turned tight fisted with their investments in shares.

In November, they pumped in the lowest sum since Narendra Modi led-BJP government came to power in May this year. Their net investment in stocks declined to a mere Rs 1,677 crore - a 72% fall compared with the previous month.

In October, equity MFs had poured in nearly Rs 6,000 crore in shares.

According to sector executives, relatively higher redemptions coupled up with a cautious strategy adopted by fund managers led to lower allocation to shares. This is despite the fact that overall gross sales of equities schemes remained strong at around Rs 11,000 crore.

Interestingly, such a development has come at a time when their foreign counterparts - the FIIs, invested almost 40% more money in Indian shares during the month.

However, sector executives maintained that it's a tactical call and need not necessarily be seen as a directional one as underlying current in stock markets continues to remain buoyant.

So far this financial year, mutual fund managers have net invested a total sum of Rs 25,000 crore - one of the highest in sector's history.

As on 31 October, the fund industry offered 394 equity related schemes (including ELSS) managing assets worth Rs 3.15 lakh crore.