Equity MFs witness record inflows of nearly ₹34,700cr in May
Equity mutual funds in India experienced a significant surge in investments, reaching an all-time high of ₹34,697 crore in May. This represents an impressive 83.42% increase from the previous month's figures. The fresh data was revealed by the Association of Mutual Funds in India (AMFI), the industry trade body for mutual funds. The inflows into open-ended equity funds have now been positive for 39 consecutive months. The previous record for net inflows was ₹28,463 crore, achieved in March 2022.
Sectoral and thematic funds drive equity mutual fund investments
The surge in net investments into open-ended equity funds was driven by sectoral and thematic funds, which saw net buying of ₹19,213.43 crore during May. The newly launched HDFC Manufacturing Fund attracted ₹9,563 crore from investors during its new fund offer (NFO) period. "Despite potential high volatility from FII selling, ongoing general elections, GDP data, and other minor events in May, investors remained steadfast in their pursuit of returns," said Gopal Kavalireddi, Vice President-Research at FYERS.
Smaller-cap funds attract investor interest
Investor interest remained strong in smaller-cap funds, with small-cap and mid-cap funds seeing net inflows of ₹2,724.67 crore and ₹2,605.70 crore, respectively. However, large-cap funds saw relatively lower net investments of ₹663.09 crore during the month. The surge in inflows occurred despite Indian equity benchmarks trading largely flat in May, with the BSE Sensex and the NSE Nifty inching lower by around 1%.
SIP investments and new fund offers contribute to record inflows
Investment through systematic investment plans (SIPs) rose to ₹20,904 crore in May, up from ₹20,371 crore in April. This increase was attributed to new fund offer listings and investors taking advantage of market volatility to add equity schemes to their portfolios through SIPs as well as lumpsum investments. The record inflows were also supported by fresh investments into debt funds, with overall open-ended mutual funds seeing net inflows of ₹1.11 lakh crore during May.
