Equity fund collections dip with market slump - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Equity fund collections dip with market slump

Feb 15, 2001

Quarterly data released by the Association of Mutual Funds in India (AMFI) reveals that growth (equity) fund collections witnessed a fall in the last quarter (Oct-Dec) of Year 2000 largely due to uncertainty in equity markets.

BSE Sensex over the quarter Oct-Dec 2000

Equity markets have shown little character over the quarter Oct-Dec 2000. Fall in dotcoms across the globe (and in India) have fuelled concerns of a breakdown in the new economy model.

Fund flows in the quarter Oct-Dec 2000
Fund Type Inflows Outflows Net Inflows
Growth 57.2 49.2 8.0
Income 57.8 48.3 9.5
Balanced 5.2 8 -2.8
Liquid/Money Mkt 97.1 87.6 9.5
Gilt 4.6 7.3 -2.7
Equity-linked Schemes 0.1 0.5 -0.4
(All figures in Rs bn)

The chart above unfolds the story of large-scale growth fund redemptions in the quarter Oct-Dec 2000. Panic among growth fund investors set in mainly due to volatility in equity markets in that period. As net asset values (NAVs) of growth funds crashed, investors made a rather hurried exit. That explains why despite inflows in excess of Rs 57 bn, net inflows were still a paltry Rs 8 bn.

Indian investors have shown little maturity in handling volatility in their mutual fund investments. Even a slight dip in equity markets has made them redeem their investments in panic, thereby defeating the very purpose of using the mutual fund avenue for investments. Investing in mutual funds means not having to track stock markets on a daily or even a weekly basis. It also means reposing your faith (along with your money) in the fund manager and letting him do his job. Growth fund investors must realise that their investments must be made with a time frame of at least 18-24 months, if they want to see some appreciation.


Equitymaster requests your view! Post a comment on "Equity fund collections dip with market slump". Click here!

  

More Views on News

Sorry! There are no related views on news for this company/sector.

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS