Mutual funds pulled out more than Rs 8,000 crore from stock markets in March due to profit-booking, even as they invested over Rs 68,000 crore in the entire past fiscal.
This also marks the first outflow since May 2014, when MFs had pulled out Rs 1,078 crore. Prior to that, they had been continuously infusing money into stock markets.
Wealthforce.com Founder Siddhant Jain said: “Coming month seems good as it is the start of a new financial year and a lot of retail investors start their SIPs with a new financial year. We expect good inflows into MFs leading to them to putting money into the market.”
Despite huge outflow in March, MFs registered a big net inflow of Rs 68,281 crore in the financial year 2015-16 ended last month. In comparison, fund managers had invested Rs 40,722 crore in 2014-15 while they pulled out over Rs 14,000 crore in the preceding financial year.
“The reason for the huge outflow (last month) by MFs in the stock market could be two-fold. First, since it is the financial year end, a lot of banks and corporates would have pulled out their investments to balance their books and meet the cash flow requirements.”
“Second, the market is up about 8-8.5 per cent since a month ago. So a lot of investors, mainly institutional, could be doing some profit-booking and exiting their mutual fund positions, leading to outflows,” he added.
According to latest data with the Securities and Exchange Board of India (SEBI), fund managers offloaded shares to the tune of Rs 8,058 crore last month.
However, Foreign Portfolio Investors (FPIs) pumped over Rs 21,000 crore into equities during the period under review.