India's equity mutual fund managers emerged as the largest net sellers in the sector's history in the financial year gone by.
The year, which witnessed benchmark indices giving returns as high as 15% at one point of time, saw fund managers selling shares worth a whopping Rs 22,750 crore.
This is close to 17 times of what they sold in the previous financial year. Continuous redemption pressure from investors forced fund managers to remain in the selling spree throughout the year. All months of the year saw fund managers liquidating their holdings as the markets inched higher and investors chose to get out of the markets.
Industry officials say that at every rise in the stock market there were redemptions - which only got intensified as Sensex
hovered near 20,000 levels - a big psychological mark for investors.
"And there were many investors who had been stuck in the market for 3-4 years since markets' earlier peak levels. They were first to exit with whatever little gains they made," explains chief executive of a mid-sized fund house.
According to the industry body Association of Mutual Funds in India (Amfi), till February this year equity segment of the sector saw a massive net outflow of Rs 15,354 crore. It is interesting to note that in FY12, the overall net outflows from equities stood in a positive territory at Rs 122 crore.
Already, till February 2013, MF industry had closure of 4.25 million equity folios, once again, the largest in sector's history. During the year, assets under management (AUM) of equity schemes declined to 1.76 lakh crore as on 28 February, 2013 against Rs 1.82 lakh crore last year.