Equity MFs net buy Rs 4,000 crore of stocks in July, lowest in 17 months

With equity indices touching record highs last month, fund houses chose to go slow on buying stocks.

In July, equity fund managers picked up shares worth Rs 4,000 crore, which was the lowest since February 2017, according to data compiled by the Securities and Exchange Board of India.

Also, net investments were 57 percent lower than June’s tally of Rs 9,200 crore and 67 percent lower than the one-year monthly average of Rs 12,200 crore.  

Fund officials attributed the drop in equity investments to slowing inflows into equity schemes. They also said that high net worth individuals or HNIs, who are not used to higher market volatility, redeemed their investments.

However, they expect money to come back in the coming months. In July, both Nifty and Sensex have risen 6 percent each.

Fund managers said while inflows through systematic investment plans (SIPs) continued, redemption has been in line with the average monthly redemption in FY18.

Association of Mutual Funds in India is yet to release monthly redemption numbers for July.

Fund managers also said that certain schemes sold their holdings in the cash market to buy in the futures market, given the negative spreads in the futures market.