INSUBCONTINENT EXCLUSIVE:
But a closer scrutiny of gross redemptions to sales ratio suggests that the scales are increasingly tilting in favour of the former.
In
August, the month in which broader indices continued their northward climb, gross redemption to gross sales ratio reached 65.9%, compared
with a median of 55% in the last 24 months, industry data showed
Gross redemptions in August stood at ?14,948 crore, the highest in the past five months.
Net inflows into equity mutual funds have been
consistently dropping over the past four months, declining to ?7,734 crore in August
This is 26% lower than the average of the past two years during which funds invested a total of ?231,031 crore in local equities
By contrast, overseas funds invested ?26,010 crore in the same period.
There are a couple of reasons behind the gross redemption to gross
sales ratio heading northward
First, about 80% of the top 200 equity funds have underperformed their benchmarks year to-date
In the past 10 years, on an average, 33% of the top 200 funds underperformed their benchmark indices, Bloomberg said, citing data compiled
by Goldman Sach.
Redemption PressurePositive historical returns have been pivotal in drawing savers to mutual funds
average, industry data showed
The one year SIP returns of 107 schemes of a total of 137 have been negative in the last one year, according to Accord Fintech.
Second, the
Hence, fresh equity investments are relatively less attractive now.
