Mutual fund investors pulled out as much as Rs 47,000 crore in October -- the highest redemption from MF schemes in a month so far this fiscal -- triggered by the meltdown in equity markets.
At the end of October, investors redeemed funds worth Rs 46,793 crore, with maximum of withdrawals coming in in fixed income plans, a monthly report by Association of Mutual Funds of India (AMFI) said.
The redemptions in mutual fund schemes have been on an increase in the current fiscal, and in September they had witnessed withdrawals to the tune of Rs 45,655 crore.
Fixed income plans, with assured returns annually, saw a maximum pullout of Rs 52,820 crore as on October, followed by equity funds investing in stocks worth Rs 706 crore.
Analysts said fixed maturity plans have witnessed panic redemption in October on concerns about the credit quality of debt papers held by these schemes.
However, liquid or money market schemes, with higher liquidity and short maturity period was the flavour with investors as the scheme witnessed repurchases worth Rs 3,256 crore.
In contrast, last month the liquid scheme witnessed a redemption of Rs 19,675 crore, following fixed income plans, which had witnessed redemption pressure of Rs 26,665 crore in September.
Analysts said the plunge in the stock market and huge redemptions in liquid schemes by corporates and banks has led to the sharp decline in assets of fund houses.
The combined assets under management of the mutual fund industry saw an 18 per cent fall in October, dipping below the Rs five-trillion mark for the first time this year. "The sharp fall of about 25 per cent in valuations of stocks in the secondary market and redemptions in equity as well as liquid schemes, and lack of any fresh inflows have led to the decline in the assets under management in the past month," Taurus Mutual Fund Director R K Gupta said.
Also, Gilt funds, which invest in government securities, and Gold Exchange Traded Fund saw inflows of Rs 3,725 and Rs 140 crore, respectively.
Gilt funds are mutual fund schemes floated by asset management companies with exclusive investments in government securities.
According to data on the Securities and Exchange Board of India website, mutual funds have been net buyers to the tune of Rs 1,432 crore in equities in October.
The combined average assets under management (AUM) of the 35 fund houses in the country saw an erosion of over Rs 97,000 crore and dropped to Rs 4,31,901.42 crore at the end of October.