As per data obtained till 30th March 2016, mutual fund sales to the tune of Rs. 8,053 have already been recorded in the month of March. This total value is the highest as compared to the sales volumes recorded during previous months. This news comes on the back of a bullish trend in the equities market as observed by the 10% gain recorded by benchmark indices during March 2016.
Experts say this large sales volume is in fact due to some technical market factors and not because there has been a major alteration in the market perspective of fund managers. A major portion of these sales have been attributed to the maturity of equity-linked savings schemes (ELSS), such as the Rajiv Gandhi Equity Savings Scheme, arbitrage and dividend stripping.
Last year, arbitrage funds had emerged as a favorite among individuals with high net worth and corporate investors. This has increased the total Asset Under Management (AUM) contribution of these key investors to 6.5% in 2015 as compared to the 1% level recorded two years ago. Some analysts have also commented that arbitrage fund investments worth between Rs. 2,500 to Rs. 3,000 Crore were withdrawn by these key investors and temporarily deposited with banking institution in March. Organisations may have resorted to this measure in order to increase their deposit base with banking institutions prior to the end of the current fiscal.