• 19/08/2022 4:30 pm

MFs also bought Rights Entitlement shares of Arvind Fashions, Gateway Distriparks and PVR in July.

Sunil Shankar Matkar
Equity funds in July witnessed an outflow for the first time in more than four years, with outflow in equity cash segment doubling compared to June.
The inflow into equity funds has been declining for five consecutive months. In July, mutual fund houses sold Rs 2,480 crore in equity schemes against an inflow of Rs 240 crore in June. The outflow in the cash segment was Rs 7,231.99 crore in July against Rs 3,689.67 crore in the previous month.

The big reason was profit booking and redemption pressure as the market rallied 50 percent from March lows, though FIIs were net buyers in July (Rs 2,490.19 crore) and June (Rs 5,492.95 crore).

“With a sudden rally in the market post COVID-19, investors have rushed to book profits which led to such high redemptions in the equity mutual funds,” Narnolia said.

Joseph Thomas, Head of Research at Emkay Wealth Management, said the outflow may stabilise over the next few months. “While we may see the current trend continuing in the shorter term, the course may be steadied on the availability of more macro data in the coming months.”

ALSO READ: Equity mutual funds see first monthly net outflow in 4 years; what lies ahead?

In July, mutual funds picked 10 fresh stocks, including Borosil, Hester Biosciences, Hindustan Foods, Novartis India, PTC India Financial Services, Shivalik Rasayan and Stylam Industries, Dolat Capital said. These are all smallcaps.

They also bought Rights Entitlement shares of Arvind Fashions, Gateway Distriparks and PVR in July.

MFs also exited nine stocks in the month gone by. These are Aarti Surfactants, Bhageria Industries, Borosil Renewables, Clariant Chemicals (India), Consolidated Construction Consortium, Dhampur Sugar Mills, Flora Textiles, Geojit Financial Services and Monte Carlo Fashions, said Dolat Capital.

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