MUMBAI: Inflows into mutual fund equity schemes in May hit their lowest levels in 13 months at Rs 19,013 crore. The May inflows were down 22% month-on-month, according to data from the Association of Mutual Funds in India (Amfi), with investors staying cautious despite stocks rebounding from their March lows.
With the markets rallying smartly—the Nifty gained 1.7%, the industry’s total assets under management (AUM) went up to Rs 72.2 lakh crore from Rs 70 lakh crore in April. Inflows into the hybrid category touched Rs 20,765 crore, led by Rs 15,702 crore into arbitrage funds.
At Rs 1,250 crore, the inflows into the large-cap schemes were 53% lower than in April, falling to their lowest levels since July 2024. Inflows into the mid-cap schemes were also down at Rs 2,809 crore, the lowest level seen since last July. On a m-o-m basis, flows into mid-cap schemes were down 15%, while those into small-cap schemes were down 20% to Rs 3,214 crore, the lowest levels reported since September.
Venkat N Chalasani, chief executive, Amfi, said the moderation in equity inflows reflects cautious investor sentiment amid market volatility. “Such phases often witness a natural reallocation towards hybrid and arbitrage schemes, offering a more balanced approach during uncertain times,” he said, adding that it is only a small blip during this particular month.
Anoop Vijaykumar, head of equity at Capitalmind MF, said large-cap allocations have cooled sharply as investors are recalibrating their risk-reward expectations. “The relatively modest decline in small- and mid-cap inflows suggests that the appetite for growth stories remains intact, though tempered by valuation consciousness,” Vijaykumar said. The pause should help earnings catch up with prices and create healthier entry points,” he added.
Redemptions from equity schemes were at Rs 37,591.33 crore. According to Nilesh D Naik, head of investments of PhonePe’s share market, the net-to-gross equity inflow ratio has dropped to 34% in May compared to an average of 53% in the past six months and 51% in 12 months. “With the market seeing further recovery in May, the redemptions have increased,” Naik said, adding that if the markets continue to remain strong, this trend may continue for another month or so.
Source: The Financial Express
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