There is an atmosphere of softening in the stock markets due to Corona crisis and investors are hesitant to invest money. During this period, investment in equity-based schemes like "Equity Linked Saving Scheme" (ELSS) has fallen by 11 per cent to Rs 12,950 crore.
Investors' sentiment has been deeply affected by the rising cases of Corona virus infection and the softening environment in the stock market. Due to this, investment in equity mutual funds has reached a low of 46 months in May.
Equity mutual funds invest the money they collect from investors in the stock market. During this period, investment in equity-based schemes such as Equity Linked Saving Scheme (ELSS) fell by 11 per cent to Rs 12,950 crore. However, there was a steep decline of 51.8 percent in April. In this way, equity schemes have seen the first decline for the second consecutive month after September 2019.
However, in May, the redemption rate of these schemes has also fallen by 7.4 percent. Because of this, net investment in equity mutual fund schemes has reached a five-month low during the month of May. It was Rs 5,257 crore in May as compared to Rs 6,213 crore in April. Overall, the asset under management of equity mutual fund schemes declined 1.4 per cent to Rs 6.5 lakh crore.
Market fluctuations
Significantly, after the worst monthly decline in nearly a decade, there was a comeback in the stock markets in April and saw a 14.4 percent rise, but again in May, the Sensex saw a decline of 4 percent.
Investment in SIP is also decreasing
Individual or small investors invest 87 per cent in equity oriented schemes and these days they are very conscious about investing. His attitude can also be understood by the fact that investment in Systematic Investment Plan (SIP) has been falling over the last two months. Monthly contribution of small investors was at a high of Rs 8,641 crore in March 2020 but in the next two months it there has been a decline of about 3 percent.
Fall in equity value
According to the latest fund folio report by Motilal Oswal Institutional Equities, the total equity value of the top 20 asset management companies (AMCs) declined by 1.6 per cent in May. The highest monthly decline has been in the equity value of HDFC Mutual Fund and Nippon India Mutual Fund. Both of these have fallen by 3.6 percent. After this, the equity value of Franklin Templeton Mutual Fund declined by 2.4 per cent, SBI by 2.2 per cent and the value of Axis Mutual Fund by 1.9 per cent.
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