Maintaining their selling spree for the sixth straight month, mutual funds pulled out Rs 30,760 crore from investments in November on profit booking and experts think the outflow trend will continue except there is a correction in markets.
With this, net departure by mutual funds has reached over Rs 28,000 crore in the first 11 months of the continuous year, data possible with the SEBI registered.
The markets, despite the abandonment from MFs in the last few periods, have continued to rise as flows from FPIs have been strong.
Foreign Portfolio Investors have placed in over Rs 1.08 lakh crore in the Indian equity markets through the January-November period of 2020.
The total inflows have also not picked up much as the result of COVID-19 on private investor's income is yet to normalize, she added.
Making a similar record, Omkeshwar Singh, said there has been a very clear demonstration in November coupled with markets at an all-time high, which assisted many investors to book profits as they are not very easy at this level and the same can be evident in the latest data.
According to the data, MFs picked out Rs 30,760 crore from equities in November. This has become the outflow to over Rs 68,400 crore since June.
MFs retired Rs 4,134 crore in September, Rs 9,213 crore in August, Rs 9,195 crore in July, and Rs 612 crore in June.
However, they advanced over Rs 40,200 crore in the first five months of the year. Of this, Rs 30,285 crore was founded in March.
Diva Sharma, the co-founder at Green Portfolio, announced the rise in markets and higher estimates have triggered the recent withdrawals from equities.
Going forward, Bala said, "we require equity outflows to continue to remain tepid until there is some improvement in the equity market".
Kaustubh Belapurkar, Director – Manager Analysis at Morningstar India said net inflows into equity projects from investors, which could be triggered by a marked improvement or longer-term visibility of pick-up in economic increase, would result in net positive investments by MFs in stocks.
Green Portfolio's Sharma said decent improvement would induce investors to increase equity allocations going ahead.
"Robust Q2 achievement by companies and a better-expected Q3, rising GST numbers, and positive liquidity from global investors shall secure any significant retreats from equities in the coming term," he added.