Equity MF Net Inflows Decline For 5th Month; SIPs Hit Record High In May

Net inflows into equity mutual funds slipped to a 13-month low in May, marking the fifth consecutive month of reduction. Data released by the Association of Mutual Funds in India on Tuesday, June 10, showed that net inflows dropped by 22% month-on-month to ₹190.13 billion. 

This decline was observed across large-cap, mid-cap, and small-cap fund categories, despite Nifty 50 Index advanced by 1.7% in May, marking its third consecutive month of gains. 

Inflows into large-cap funds experienced a substantial reduction, falling to ₹12.5 billion in May. Mid-cap funds saw inflows decrease by 15% to ₹28.09 billion, while small-cap funds registered a 20% decline, with inflows settling at ₹32.14 billion. 

Sectoral Activity
Within the equity segment, specific sectoral and thematic funds showed varied performance. Thematic funds, which focus on particular industries or themes, received inflows of ₹20.52 billion in May, a slight increase from ₹20.01 billion in April. 
Among broader categories, flexi-cap funds attracted the highest inflows within equity at ₹38.41 billion.

However, certain sectors experienced outflows. Equity Linked Savings Schemes saw outflows of ₹6.78 billion. Dividend yield funds also faced redemptions, with outflows of ₹0.20 billion. In contrast, multi-cap funds, which invest across large, mid, and small-cap companies, experienced an increase in inflows to ₹29.99 billion.

In the debt mutual fund segment, liquid funds witnessed significant outflows of ₹402.05 billion in May, a stark contrast to the ₹1,180 billion in inflows recorded in April. Conversely, corporate bond funds attracted robust inflows of ₹119.83 billion, a notable increase from April's ₹34.58 billion. Credit risk funds continued to experience redemptions, with outflows of ₹2.48 billion. Money market funds also saw inflows of ₹112.23 billion.

Systematic Investment Plan contributions continued their upward trajectory, reaching a new record high of ₹266.88 billion in May. The number of SIP accounts also increased, reaching 85.6 million from 83.8 million in April, highlighting continued retail investor participation through this disciplined investment route.  

The overall mutual fund industry’s total Assets Under Management rose to ₹72.20 trillion as of May 31, reflecting a 3.14% month-on-month growth. Open-ended equity fund AUM increased by 4.8% month-on-month to ₹32.05 trillion, while open-ended debt fund AUM stood at ₹17.54 trillion.