AHMEDABAD: With the stock market indices falling over the past couple of months, investors’ wealth has been massively eroded.
According to data from the Association of Mutual Funds in India (AMFI), assets under management (AUM) for equity mutual funds of Gujarat investors declined by Rs 14,080 crore in May and June 2022.
With market indices crashing due to geopolitical uncertainty and FIIs withdrawing heavily from Indian equity markets, the net asset value of investments fell.
According to AMFI data, AUM for equity mutual funds stood at Rs 1.29 lakh crore in June 2022, down by Rs 6,922 crore. The erosion was Rs 7,158 crore in May 2022, down from Rs 1.43 lakh crore in April this year. Mumukshu Desai, director of a city-based financial advisory firm, said, “The majority of the wealth erosion is due to reduction of net asset value due to the wake of falling stock market indices over the past two months due to global inflation and geopolitical tensions. While investors are not taking major investment calls, they are not withdrawing in a major way either.”
Industry players say the stock market plunged due to massive withdrawals from foreign institutional investors (FIIs) who have cumulatively sold securities worth Rs 3.12 lakh crore since October 2021. “With such massive outflows, the market correction should have been much steeper. However, domestic inflows have remained robust particularly through systematic investment plans,” Desai said.
