Mutual funds alert! Rs 17,600 crore pulled out from stock markets - This is the reason
Mutual funds have pulled out Rs 17,600 crore from stock markets in July-August mainly on account of negative sales in equity-oriented schemes.
Mutual funds have pulled out Rs 17,600 crore from stock markets in July-August mainly on account of negative sales in equity-oriented schemes. This comes against the backdrop of the coronavirus pandemic-related disruptions, a sharp slowdown in economic activity across the globe and a volatility in equity markets, as per a report by news agency PTI.
Prior to the withdrawal, mutual funds (MFs) had made a net investment of Rs 39,755 crore in stock markets during January-June 2020, data available with the Securities and Exchange Board of India (Sebi) showed.
Equity-oriented mutual funds have witnessed a cumulative net outflow of Rs 6,450 core in July and August while hybrid funds too saw a cumulative net withdrawal of Rs 12,121 crore over the same period.
On the other hand, mutual funds have invested close to Rs 83,000 crore in the debt markets during the period under review. This could be due to debt mutual fund categories such as low duration, money market, short duration, corporate bond, floater and banking & PSU funds saw huge inflows in this period.
As per the data, MFs pulled out Rs 9,195 crore in July and Rs 8,400 crore in August. However, they put in a net sum of Rs 39,755 crore in the first six months of the year. Of this, a staggering Rs 30,285 crore was invested in March.
However, the surge in markets post that would have prompted these allocation funds to cut their exposure in equities as a rebalancing activity in order to maintain an optimal equity allocation in their portfolios.
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