Record redemptions push equity mutual funds into red

COIMBATORE: Despite a good growth in sales, record redemptions in March, the highest in more than two years, pushed the diversified equity mutual funds (MFs) into the red with the category registering net outflows after a gap of two months. Equity MFs witnessed net outflows to the tune of Rs 2,016 crore in March.
While sales from existing equity schemes grew 23.4% month-on-month (m-o-m) to Rs 6,179 crore, redemptions surged 135.8% m-o-m to Rs 8,236 crore, data with the Association of Mutual Funds in India (AMFI) shows.With benchmark indices more than doubling in the past fiscal, investors used the opportunity to make a profitable exit. In all, investors made redemptions totalling a massive Rs 60,245 crore in fiscal 2011, AMFI data shows.
"A large number of investors booked profits at higher levels," says Jaideep Bhattacharya, chief marketing officer, UTI MF. "We are seeing redemptions across funds," says a top official with a leading fund house. Investors are pulling money out of equity funds and are channelling it to debt funds, he says. Infrastructure funds, which have underperformed the broader market, have seen outflows and investors are investing the redeemed money in monthly income plans as well, he says.