Equity Mutual Fund Inflows Fall 22% in May Despite Market Gains – AMFI Report
Equity mutual fund inflows dropped by 22% in May, even as markets showed gains, reveals AMFI data. Explore the latest trends and what this means for investors.
Equity Mutual Fund Inflows Fall 22% in May Despite Market Gains – AMFI Report
According to data released by the Association of Mutual Funds in India (AMFI) on Monday, the mutual fund (MF) industry recorded net inflows of Rs. 29,108 crore in May 2025, driven mainly by debt and hybrid fund investments. However, equity mutual funds continued to witness a decline in net inflows for the fifth consecutive month, despite positive market performance.
Equity Mutual Funds Register 22% Decline in Inflows
Actively managed equity mutual funds attracted Rs. 19,013 crore in net inflows in May, marking a 22% drop from Rs. 24,269 crore in April. This decline occurred even as benchmark indices performed well, with the NSE Nifty50 rising 1.71% and the BSE Sensex gaining 1.51% during the month. The dip highlights investor caution amid high market valuations and ongoing volatility.
Among equity fund categories, large-cap funds experienced the steepest fall, with inflows plunging 53% to Rs. 1,250 crore. Mid-cap and small-cap funds also saw declines of 15.25% and 19.64%, respectively, attracting Rs. 2,809 crore and Rs. 3,214 crore. Flexi-cap funds, offering diversified exposure, reported a 30.68% drop to Rs. 3,841 crore. In contrast, sectoral and thematic funds posted modest gains, receiving Rs. 2,052 crore, while multi-cap funds defied the trend with a 17.54% increase to Rs. 2,999 crore.
Record SIP Contributions Reflect Strong Retail Interest
Monthly Systematic Investment Plan (SIP) contributions hit a new high of Rs. 26,688 crore in May, marginally up from Rs. 26,632 crore in April, demonstrating continued retail investor enthusiasm despite the dip in lump-sum equity inflows. Approximately 59 lakh new SIP accounts were added in May.
Debt Mutual Funds Face Outflows, Select Segments Gain
Debt mutual funds saw net outflows of Rs. 15,908 crore in May, reversing the massive inflows of Rs. 2.19 lakh crore in April. Liquid funds experienced heavy redemptions of Rs. 40,205 crore, followed by Rs. 8,120 crore in outflows from overnight funds. However, corporate bond funds attracted Rs. 11,983 crore, and money market funds saw inflows of Rs. 11,223 crore, indicating investor preference for short-term, lower-risk debt options.
Hybrid and Arbitrage Funds Bounce Back
Hybrid funds made a strong comeback, posting net inflows of Rs. 20,765 crore in May compared to outflows of Rs. 14,248 crore in April. Arbitrage funds maintained their momentum, drawing Rs. 15,702 crore as investors sought stability amid market uncertainties.
New Fund Offers (NFOs) Gain Momentum
New Fund Offers (NFOs) contributed Rs. 4,170 crore in net inflows during May, a significant rise from Rs. 350 crore in April. Most new launches were index funds and thematic ETFs, reflecting changing investor preferences.
Mutual Fund Industry AUM Hits Record High
Despite the slowdown in equity inflows, the mutual fund industry's total assets under management (AUM) rose 3.14% to a record Rs. 72.20 lakh crore in May, up from Rs. 69.99 lakh crore in April.
