Fund managers did some big time selling in the month of June as the BSE Sensex continued its south-bound journey for most of the month.

There were only 5 days when fund managers made net purchases in June, and sold on the remaining days.

The chart shows the buying and selling activity of fund managers vis-à-vis the performance of the BSE Sensex in June. A dip in the BSE Sensex is invariably punctuated by selling by fund managers. However, on certain days (15th June, 18th June, 22nd June) when the Sensex fell fund managers still bought stocks. This is mainly because a lot of stocks across the board are being traded cheaply and fund managers do not want to lose out on the buying opportunities. Also some fund managers that had entered stocks at a higher level bought these stocks at lower levels for averaging.

The month of July is unlikely to be too different from June. If anything, with the abolition of badla taking effect in July, the month is likely to witness even more selling. For the retail equity fund investor, this should not be a cause for panic. A dip in equity markets is a good opportunity for the investor to increase exposure in an equity fund at a lower level. Equity funds are long term products (at least 2 years) and the investor needs to be patient in order to see some return on investment.

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