Equity mutual fund inflows slump to 12-month low of Rs 19,013 cr in May, shows AMFI data

Net investments in equity mutual funds saw a sharp dip in May, hitting their lowest level in a year, data released by the Association of Mutual Funds in India (AMFI) on June 10 revealed. The total net inflow into open-ended equity funds stood at Rs 19,013 crore, marking a 21.66% drop compared to April. In contrast, the BSE benchmark Sensex surged 1.51% and NSE Nifty50 advanced 1.71% in May.

Investor sentiment turned cautious in May, with large-cap mutual funds witnessing a steep 53.19% decline in net inflows, dropping to Rs 1,250.47 crore. The sharp fall signals a clear shift away from blue-chip stocks, traditionally seen as stable long-term bets.

Mid-cap funds also experienced a pullback, with inflows dipping 15.25% to Rs 2,808.68 crore, indicating tempered investor interest in mid-sized companies. Small-cap funds, which had been drawing robust interest in past months, saw a 19.64% decline in inflows, settling at ₹3,214.21 crore—suggesting growing caution amid prevailing market volatility.

In the debt mutual fund segment, liquid funds witnessed a sharp reversal with outflows of Rs 40,205.4 crore in May, a stark contrast to the Rs 1.18 lakh crore inflows recorded in April. Corporate bond funds, on the other hand, saw robust inflows of Rs 11,983.3 crore, significantly higher than April’s Rs 3,458.42 crore. Credit risk funds continued to face redemptions, posting outflows of Rs 248 crore in May—slightly lower than the Rs 301.7 crore withdrawn in the previous month.

Among passive investment options, exchange-traded funds (ETFs) logged net inflows of Rs 4,086.8 crore in May, a substantial drop from ₹19,056.66 crore in April. Gold ETFs, however, staged a turnaround with Rs 292 crore in inflows, bouncing back from an outflow of Rs 5.82 crore the previous month.

In May, ELSS funds received Rs 678 crore, which is higher than the Rs 372 crore they received the previous month. However, dividend yield funds experienced outflows of Rs 20.82 crore, whereas they had inflows of Rs 51.47 crore in April. Thematic funds saw inflows of Rs 2,052.50 crore in May, slightly more than the Rs 2,001 crore they received in April.

New Fund Offer (NFO) inflows significantly increased to Rs 4,170 crore in May, up from just Rs 350 crore in April. It's great to see such positive growth in the market! Keep investing wisely and watch your money grow.

The mutual fund industry’s total assets under management (AUM) rose to Rs 72.20 lakh crore as of May 31, reflecting a 3.14% month-on-month growth. Open-ended equity fund AUM rose 4.8% month-on-month to Rs 32.05 lakh crore, while open-ended debt fund AUM stood at Rs 17.54 lakh crore.

Overall, the mutual fund industry registered net inflows of ₹29,108 crore in May across all categories, indicating continued investor engagement despite the moderation in equity fund investments.