Inflows into equity mutual funds recovered in the month of May, rising 16 percent MoM to ₹18,529 crore despite uncertainties around the ongoing geopolitical crisis, rising inflation and consistent foreign outflows. This is the fifteenth straight month of inflows in equity mutual funds.
However, the overall mutual fund schemes including debt and equity, saw outflows in May worth ₹14,598.6 crore in May against an inflow of ₹16,193.7 crore in April, data from the Association of Mutual Funds in India (AMFI) showed on Thursday. This was mainly due to major outflows in ultra-short duration funds, short-duration funds, and money market funds.
Indian equity benchmarks also declined for the second consecutive month in May as volatility spiked with the benchmark indices down over 2.5 percent during the month.
NS Venkatesh, chief executive officer at AMFI said, "May was a reasonably “good month” for the mutual fund industry. Debt-oriented schemes led the overall outflows. Investors pulled out of such funds because of the rate hikes by the central bank. Despite volatility and interest rate hikes to fight inflation, the industry is seeing good numbers, especially in equity mutual funds."
Category-wise, all equity-oriented mutual fund categories continued to see inflows in May. Flexi cap funds saw the highest net inflow of ₹2,939 crore. Meanwhile, large-cap, large & mid-cap funds and sectoral/thematic funds also saw inflows of over ₹2,200 crore each.
However, multicap funds witnessed the least investments among all categories.
Inflow through SIP (Systematic Investment Plan) rose to ₹12,286 crore in May from ₹11,863 crore in April. This is the ninth consecutive month of over ₹10,000 crore SIP inflows. It had hit an all-time high of ₹12,327.9 crore in March.
“I believe the consistent SIP flows are supporting the net positive sales numbers in equities. Through the ongoing volatility, we see continued interest amongst retail investors to allocate to equity MFs. The spread of new flows is well diversified across categories (i.e. Large-cap / Mid Cap / Flexi Cap etc…). Dynamic / BAF category also continues to be positive and this is very good for retail investors in managing risks and volatility," said Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC.
Total assets under management (AUM) stood at ₹37.3 lakh crore in May against ₹38.88 lakh crore in April.
