Equity mutual fund inflows fall to one-year low in May; industry sees ₹64,004 crore outflow

Net inflows into equity-oriented mutual fund schemes fell to a one-year low of ₹22,908 crore in May, down sharply by 40% from ₹38,440 crore in April, as volatile market conditions weighed on investor sentiment, according to data released by the Association of Mutual Funds in India (AMFI) on Wednesday.

The moderation in equity inflows, coupled with a sharp reversal in debt fund flows, led the mutual fund industry to record net outflows of ₹64,004 crore during the month, compared with net inflows of ₹3.22 lakh crore in April.

Consequently, the industry's assets under management (AUM) declined to ₹81.6 lakh crore at the end of May from ₹81.92 lakh crore a month earlier.

Hybrid funds

Hybrid funds continued to attract investor interest, garnering net inflows of ₹10,560 crore in May. However, this was significantly lower than the ₹20,565 crore received in April.

Debt mutual funds

Debt mutual funds witnessed the sharpest turnaround, recording net outflows of ₹96,949 crore in May after attracting inflows of ₹2.47 lakh crore in the previous month. The reversal was the primary reason behind the industry's overall net outflows.

Gold ETFs

Gold exchange-traded funds (ETFs) also saw investor interest weaken, reporting net outflows of ₹725 crore in May compared with inflows of ₹3,040 crore in April. The category had attracted robust investments earlier in the year, including more than ₹24,000 crore in January.

Venkat Chalasani, Chief Executive, AMFI, said, "The MF industry’s AUM remained largely stable at ₹81.58 lakh crore in May, witnessing a marginal contraction amid ongoing global uncertainties and commodity price volatility. Equity inflows came in at ₹22,907 crore, marking the 63rd consecutive month of positive flows. The MF industry’s growth continues to be powered by robust SIP inflows, which stood at ₹30,954 crore in May. The number of contributing SIP accounts remained steady at 9.64 crore, reflecting the growing preference for mutual funds as a structured approach to wealth accumulation. With India's strong economic fundamentals, our focus remains empowering investors with the knowledge to stay committed to their long-term financial goals."

Other schemes

Meanwhile, the other schemes category, which includes ETFs and index-linked products, recorded inflows of ₹362 crore, sharply lower than ₹20,082 crore in April and ₹30,768 crore in March.

Systematic Investment Plan

Systematic Investment Plan (SIP) contributions remained resilient despite the broader slowdown. SIP inflows stood at ₹30,954 crore in May, marginally lower than ₹31,115 crore in April.

The decline in SIP contributions came alongside a 40 per cent drop in equity fund inflows during the month. However, SIP investments remained above the ₹30,000-crore mark for the third consecutive month, indicating continued investor commitment to long-term wealth creation through regular investments.

Among equity categories, Dividend Yield Funds and Equity Linked Savings Schemes (ELSS) were the only segments to witness net outflows during the month.

Nitin Agrawal, CEO, Mutual Funds, InCred Money, said, "The Indian mutual fund industry has structurally crossed a threshold where the monthly data conversation needs to move beyond the aggregate AUM number to the quality and composition of the flows beneath it. That shift in how media and investors read this data is itself a sign of the industry's maturity."