InvestorQ : Have equity mutual funds been seeing further redemptions in the month of February 2021?
diksha shah made post

Have equity mutual funds been seeing further redemptions in the month of February 2021?

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Archita Jajjoo answered.
1 month ago
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When it comes to equity fund flows in India, there appears to be no respite and the story of heavy redemptions from equity funds continues in the month of February 2021 also. In the month of February 2021, Indian investors pulled out Rs.16,306 crore from equity mutual funds. It is ironic that Feb-21 marked the ninth consecutive month of outflows from equity funds as there has been virtually no let up.

This heavy selling in equity funds has been attributed to a number of reasons. One reason being offered is that profit booking at higher levels has triggered this sell-off. That is only partially true. There is also a shift to direct equity investing as is amply reflected by the surge in demat accounts in the last few months. CDSL and NSDL have acknowledged that demat accounts have almost doubled in the last couple of years.

For the calendar year 2020, mutual funds withdrew a sum of Rs.56,400 crore as per NSDL data. Since Jun-21, investors have redeemed Rs.124,172 crore from equity funds, which is a little over $17 billion. This is despite the sharp rally in the Nifty and Sensex in 9 months. Clearly, the lump-sum investors in mutual funds have been selling out and opting for direct equities since the SIPs continue to be rather robust.

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