Market volatility taking its toll on mutual funds
Choppy markets lead to nervous investors and lacklustre demand has hit mutual funds in February after decent action in January but the good news is redemption pressures have not kicked in yet. Market volatility is taking its toll on mutual funds and money coming into new fund offers is dwindling to a trickle. DSP ML's Natural Resources Fund has extended its closing date by 4 days to March 31 and although the fund house refused to give details about the extension, poor response by small investors could be the real reason.
But DSP ML is not alone as DSPML's Natural Resources Fund, Mirae Equity Opportunities Fund and Morgan Stanley ACE Fund are also facing the heat. Indians poured crores into equity funds in January, making it the highest monthly inflow in the past two years but in February, this all turned around. Over the past two years whenever the market has fallen mutual fund investors have stayed put and they've been rewarded for their patience.
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