HDFC Flexi Cap Fund, Nippon Small Cap: These equity mutual funds drew over Rs 1,000 crore; should you take notice?

Retail investors continued to pour money into select equity mutual funds in May, with eight schemes attracting inflows of more than Rs 1,000 crore each, underscoring the resilience of domestic participation despite bouts of market volatility.

According to data compiled by ACE MF, 475 out of 742 equity and equity-oriented mutual funds recorded positive inflows during May, with investments remaining concentrated among a handful of large and well-established schemes.

HDFC Mid Cap Fund emerged as the biggest gainer during the month, receiving net inflows of Rs 2,605 crore. The inflows helped lift the fund's assets under management (AUM) to Rs 97,350 crore in May from Rs 94,744 crore in April, further cementing its position as the country's largest mid-cap fund by assets managed.

Kotak Arbitrage Fund followed with inflows of Rs 2,127 crore, taking its AUM to Rs 72,079 crore from Rs 69,951 crore a month earlier.

Among small-cap schemes, Nippon India Small Cap Fund attracted Rs 1,931 crore in fresh investments, while Bandhan Small Cap Fund garnered Rs 1,873 crore. Nippon India Small Cap Fund remained the largest scheme in the category with assets of Rs 74,604 crore.

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Nippon India Growth Mid Cap Fund witnessed inflows of Rs 1,595 crore, taking its AUM to Rs 47,415 crore from Rs 45,820 crore in April. Quant Small Cap Fund received Rs 1,400 crore, while HDFC Flexi Cap Fund attracted Rs 1,342 crore, pushing its assets above the Rs 1 lakh crore mark to Rs 1.01 lakh crore in May.

Kotak Midcap Fund rounded out the list of schemes that received over Rs 1,000 crore in net inflows, garnering Rs 1,209 crore during the month and increasing its AUM to Rs 64,749 crore.

Flexi-cap funds and performance

Data from Elara Securities showed that investors had already displayed a strong preference for flexi-cap funds during the March-April 2026 correction period.

Parag Parikh Flexi Cap Fund led inflows among the top-35 schemes, attracting Rs 7,549 crore during March-April and accounting for around 10.1% of cumulative flows. HDFC Flexi Cap Fund followed with inflows of Rs 5,473 crore, representing 7.3% of total flows.

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Bandhan Small Cap Fund received Rs 3,416 crore during the same period, while HDFC Mid Cap Fund attracted Rs 3,072 crore. Nippon India Large Cap Fund, ICICI Prudential Large & Mid Cap Fund and Kotak Multicap Fund were also among the major beneficiaries of investor inflows.

Overall, the top-35 schemes accounted for nearly 77% of cumulative inflows during the correction cycle, indicating that investors preferred established funds with strong long-term track records.

Investors' interest

Return data suggested that investors continued to reward schemes that had delivered superior long-term performance. HDFC Mid Cap Fund, Kotak Midcap Fund and Nippon India Growth Mid Cap Fund generated three-year compound annual growth rates (CAGR) of more than 23%, among the highest in their respective categories.

In the flexi-cap segment, HDFC Flexi Cap Fund and Parag Parikh Flexi Cap Fund delivered three-year CAGR returns in the mid-teen range, while contra funds such as SBI Contra Fund and Kotak Contra Fund also posted strong returns.

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The concentration of flows into a select set of schemes highlights how retail investors are increasingly favouring funds with scale, consistent performance and experienced fund management teams, even during periods of heightened market uncertainty.