A Balasubramaniam, CEO of Birla Sunlife AMC says lack of lack conviction is preventing inflows into equity funds. "We have not seen any significant inflows in mutual funds," he says adding, "positive inflows were seen only in the month of May."
According to data released by the Association of Mutual Funds in India (AMFI), the fund industry shed around Rs 24,000 crore during the month of June, which led to decline in the overall asset base to Rs 6,88,825 crore. Most fund categories witnessed outflows during the month.
Liquid funds saw a maximum outflow worth over Rs 25,000 crore, followed by Gold ETFs (Rs 227 crore), Equity (Rs 186 crore), ELSS (Rs 100 crore), and Fund of Funds (Rs 44 crore).
However, Balasubramanian says the mutual fund industry has not seen any significant redemption pressure. "We have seen significant flows in the debt fund with a two to three year horizon," he told CNBC-TV18.
Below is the edited transcript of Balasubramanians interview with CNBC-TV18. Also watch the accompanying video.
Q: Why are mutual funds (MFs) on the sell side? Are you witnessing any kind of redemptions on profit taking or you are just tactically cautious?
A: If you look at the industry trend for the last three months we have not been seeing actually significant close except the month of May. The net inflows in the equity MFs were positive to the extent of about Rs 533 crore. But industry as a whole there has not been significant flows that have been coming in.
Even for the quarter ending June, equity schemes did not witness much of inflows except the inflows that has been coming largely through the SIPs (Systematic Investment Plan) form otherwise there has not been a significant inflow, which essentially reflects on the MFs buying and selling pattern.
Also I would assume its a function of rotation of sectors from one sector to the other sectors. There arecertain sectors which pose a little more promising from the point of view of investment and could warrant some bit of churning of assets from one to other. That could also be one of primary factors because of which you would probably see the MFs numbers being little negative.
Q: Is the selling in a market a function of the fact that