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Business Standard
a day ago
- Business
- Business Standard
Profit Booking, volatility, war fears: Mutual fund flows hit 13-month low,
Equity mutual fund schemes saw net inflows drop to Rs 19,013 crore in May 2025, the lowest in 13 months, down almost 22% from April's Rs 24,269 crore. At the same time, redemptions surged to Rs 37,591 crore, the highest since July 2024, as per data released by the Association of Mutual Funds in India (Amfi). So, what's going on, and more importantly — should you be worried? SIPs stay strong – That's good news While net inflows fell, investors like you continued to stay committed to long-term investing through SIPs (Systematic Investment Plans). In fact, SIP inflows hit a record high of ₹26,688 crore in May. That's a strong sign of resilience and discipline in retail investing, despite short-term noise. So, if you're investing through SIPs — you're doing the right thing by staying consistent. Why did net inflows drop? The sharp increase in redemptions from Rs 32,479 crore to Rs 37,591 crore indicates that many investors chose to capitalise on recent market gains by booking profits. "Equity net sales have seen a sharp downtick largely on account of higher redemptions. This was probably due to the war-like situation in the beginning of the month leading to sentiment being cautious," said Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC. Profit Booking: After a strong rally earlier in the year, many investors chose to cash out and lock in their gains, especially with the market feeling uncertain. War-Like Tensions: The launch of India's Operation Sindoor against Pakistan and global geopolitical tensions led to cautious sentiments. Valuation Concerns: Markets had run up a lot. High valuations made investors jittery and triggered redemptions, especially from large-cap funds. "The broader slowdown in equity inflows can be attributed to a mix of factors: a less buoyant equity market in May compared to April, concerns around global economic headwinds, and a possible consolidation phase or profit booking in the domestic equities following sharp rallies in the previous months and stretched valuations. Also, heightened global volatility—stemming from geopolitical tensions with India launching Operation Sindoor against Pakistan and concerns around global inflation, contributed to a risk-off sentiment among some investors," said Himanshu Srivastava – Associate Director- Manager Research, Morningstar Investment Research India. What were investors buying (and avoiding)? Flexicap Funds: Topped inflows with Rs 3,841 crore. These give fund managers the freedom to pick across large-, mid-, and small-cap stocks. Small- and Mid-Cap Funds: Still popular (Rs 3,214 crore and Rs 2,809 crore respectively) but inflows cooled, showing that investors are becoming cautious with these volatile segments. Large-Cap Funds: Received just Rs 1,250 crore — half of what they saw in April. The sharp decline suggests a tactical shift among investors toward higher-growth, though riskier, segments like mid and small caps. It also reflects some degree of profit booking, as large-cap indices had already seen considerable run-up in the months prior. Thematic & Sector Funds: Two new launches drew Rs 1,792 crore, with the total category inflow at Rs 2,052 crore. Clearly, many investors are betting on new themes and trends. "Small-cap category, despite its inherent volatility, continues to attract investor interest on the back of strong domestic sentiment and long-term return potential. However, the pace of inflows into small-cap and mid-cap funds saw some cooling compared to April, indicating a cautious undertone amid market valuations and global uncertainties. Also, investors need to be wary of inherent risks that tag along with small and mid-cap segments while making investment decisions. They should align their investments in these segments in line with their risk appetite and overall asset allocation and avoid going overboard in them, cautioned Srivastava. "Particularly encouraging is the 46% surge in hybrid fund inflows to Rs 20,765 crore, demonstrating sophisticated investor appetite for balanced investment strategies. The launch of 19 new open-ended mutual fund NFOs raising Rs 4,170 crore signals continued innovation and product development in the market. This temporary consolidation phase actually presents an excellent opportunity for long-term investors to enter India's dynamic equity markets at attractive valuations, supported by the country's strong economic fundamentals and growth prospects," said Saurabh Jain, Equity Head, Research- Fundamentals, SMC Global Securities. Key takeways for investors: With markets recovering from earlier volatility, many investors used the bounce-back to book gains. Redemptions spiked 16% to Rs 37,591 crore, the highest since July 2024. After a sharp rally, markets seemed overvalued to many. Experts say May's less buoyant equity performance led to a 'wait-and-watch' approach. Another important trend? A shift from pure equity funds to hybrid funds. Amid market volatility, hybrid schemes (like balanced or aggressive hybrid funds) recorded a 46% month-on-month jump in inflows. That means investors are looking for a bit more safety without abandoning equities altogether. "Investors seem to be cautious on equity generally as a category with lower fund flow over the par 6 months. Inflows have nearly halved from the peak. Thematic and smallcap continues to draw funds displaying a robust risk appetite of investors," said Juzer Gabajiwala, Director, Ventura. The slowdown in flows was also driven by a shift in investor preference from pure equity funds to hybrid schemes amid market uncertainty and volatility, with hybrid funds recording a 46% month-on-month surge in inflows." Despite the net outflow trend in equity schemes, the mutual fund industry crossed ₹70 trillion in AUM, thanks to SIPs and market recovery. It's a strong sign of India's maturing investor base and consistent retail participation. What should you do as an investor? Stick to SIPs: Record inflows mean disciplined investors are winning. Keep going. Rebalance if needed: If your portfolio is too small-cap heavy, consider rebalancing. Consider Hybrid Funds: If you're uneasy about full equity exposure, hybrid funds could offer a middle path. Avoid knee-jerk reactions: Don't let temporary market headlines derail your long-term goals. "Large-cap allocations have cooled sharply as Investors are recalibrating their risk-reward expectations. The relatively modest decline in small and mid-cap inflows suggests that the appetite for growth stories remains intact, though tempered by valuation consciousness. The pause should help earnings catch up with prices and create healthier entry points. Debt-fund outflows of about ₹16,000 crore look tactical—likely driven by treasury cash-management around quarter-end and an RBI policy overhang—rather than a structural shift away from fixed income. What's most encouraging is the record AUM crossing Rs 72 lakh crore, a fresh peak that underlines the long-term migration of household savings into markets. For investors, the takeaway is clear: stick to systematic plans, rebalance rather than chase performance, and let market volatility work for you instead of against you," said Anoop Vijaykumar, Head of equity, Capitalmind.
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Business Standard
2 days ago
- Business
- Business Standard
Equity MF inflows hit 13-month low in May despite market recovery
Inflows into equity mutual fund (MF) schemes declined for the fifth consecutive month in May, falling to their lowest level in 13 months at Rs 19,013 crore. This came even as gross inflows through systematic investment plans (SIPs) surged to a record high of ₹26,688 crore. The fall in net inflows was largely due to a 16 per cent month-on-month increase in redemptions. Investors pulled out ₹37,591 crore in May, the highest since July 2024, according to data released by the Association of Mutual Funds in India (Amfi). Higher outflows, experts said, were driven by profit booking amid geopolitical and trade uncertainties. 'The slowdown can be attributed to a mix of factors: a less buoyant equity market in May compared to April, concerns around global economic headwinds, and a possible consolidation phase or profit booking in domestic equities following sharp rallies in previous months and stretched valuations,' said Himanshu Srivastava, Associate Director – Manager Research, Morningstar Investment Research India. India–Pakistan tensions and heightened global market volatility may also have played a role, according to experts. 'Equity net sales have seen a sharp downtick largely on account of higher redemptions. This was probably due to the war-like situation at the beginning of the month, which led to sentiment being cautious,' said Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal AMC. The equity market saw recovery for the third straight month in May, with the benchmark Nifty 50 index rising 1.7 per cent. According to experts, some investors who had entered near market peaks may be using the recovery to exit. 'Many investors tend to refrain from redeeming when the value of their investment drops significantly below the peak value they have seen in the past— influenced by 'anchoring bias',' said Nilesh D Naik, Head of Investment Products, 'As the market started recovering from March, redemptions have gradually increased. If the market continues to remain strong, we could see this trend for another month or so, but stronger market sentiment could subsequently lead to increased gross inflows, thus normalising the ratio,' he added. While redemptions rose, fresh investments remained steady, buoyed by record SIP inflows. Investments through SIPs rose marginally to a new high of ₹26,688 crore. Despite subdued net inflows, mark-to-market gains from the market recovery contributed to a significant rise in the total assets managed by the MF industry. 'The MF industry has crossed ₹70 trillion in assets under management, reaching new highs driven by resilient retail participation and consistent SIP inflows. The growth of SIPs is particularly encouraging, indicating a shift towards disciplined, long-term investment,' said Venkat N Chalasani, Chief Executive, Amfi. Among key equity fund categories, the sharpest decline was seen in largecap funds, with inflows more than halving to ₹1,250 crore. Mid-cap and small-cap funds saw inflows fall by 15 per cent and 20 per cent to ₹2,809 crore and ₹3,214 crore, respectively.
India Gazette
2 days ago
- Business
- India Gazette
Net Equity MF inflow fell sharply in May, however SIP investment remained robust: AMFi Data
Mumbai (Maharashtra) [India], June 10 (ANI): Net equity mutual fund inflows fell sharply by 21.66 per cent month-on-month to Rs 19,013 crore in May 2025, the lowest in a year, despite a rising stock market. However, the mutual fund industry's overall AUM hit an all-time high of Rs72.2 lakh crore, backed by positive momentum in select debt categories. According to the data released by the Association of Mutual Funds in India (AMFI) on June 10, Tuesday, net inflows into equity mutual funds plunged to Rs 18,995 crore in May 2025, down from Rs24,253 crore in April 2025. This marks the lowest equity inflow in 12 months, even as the Sensex rose over 1.5 per cent and Nifty 50 gained over 1.7 per cent during the month, suggesting that investors are cautious amid elevated valuations and geo-political uncertainties. Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC said 'Equity Net Sales has seen a sharp downtick of 22 per cent largely on account of higher redemptions by 5k cr in May'25 (viz April'25). This was probably due to the war-like situation in the beginning of the month leading to sentiment being cautious.' Largecap funds bore the maximum brunt, with net inflows plummeting 53.19 per cent to Rs 1,250 crore in May, from Rs 2,671 crore in April, while midcap and small-cap funds also saw a pullback, declining 15.25 per cent and 19.64 per cent, respectively. Mid-cap fund inflows dropped to Rs 2808.7 crore in May from Rs 3,313 crore in April while small-cap funds inflows dropped Rs 3,214 crore in May from Rs 3,999.95 crore in April. This moderation suggests a potential pause in retail participation amid concerns over stretched mid- and small-cap valuations. However, systematic investment plan (SIP) contribution in May remained robust at Rs 26,688 crore as compared with Rs 26,632 crore in April. This shows retail investors faith in systematic investment remains constant. 'SIP numbers over 26000 cr is very encouraging, which implies that the fresh investment preferred route has been SIP than lumpsum' Chaturvedi added. On the debt side, debt mutual funds witnessed net outflows of Rs 15,908 crore, a steep reversal from the Rs 2.19 lakh crore net inflow in April. Most of the outflows came from liquid funds (Rs 40,205 crore) and overnight funds (Rs 8,120 crore). Narender Singh, smallcase Manager and Founder of Growth Investing said 'Compared to last year, when debt funds enjoyed net inflows, this reversal suggests growing caution, likely due to interest rate expectations'. However, corporate bond funds and money market funds attracted net inflows of Rs11,983 crore and Rs11,223 crore, respectively. Despite the drop in equity and debt inflows, the overall AUM of the mutual fund industry rose to a record Rs72.20 lakh crore, compared to Rs69.99 lakh crore in April. This growth is supported by market appreciation and continued SIP contributions. (ANI)
Time of India
2 days ago
- Business
- Time of India
Net equity mutual fund inflows slide 21.7% in May; lowest in a year; overall AUM reaches Rs 72.2 lakh crore
NEW DELHI: Net equity mutual fund inflows tumbled 21.66% month-on-month to just Rs 19,013 crore in May 2025, reaching a yearly low, despite rising market conditions. Yet, buoyed by strong gains in certain debt schemes, the mutual fund industry's total AUM reached a peak of Rs72.2 lakh crore, revealed the Association of Mutual Funds in India (AMFI) data on Tuesday. The data showed that net equity mutual fund inflows decreased to Rs 18,995 crore in May 2025, compared to Rs 24,253 crore in April 2025. This represents the lowest equity inflow in a year, whilst the Sensex increased by over 1.5 per cent and Nifty 50 grew by over 1.7 per cent during the month, indicating investor caution amidst high valuations and global political tensions. "Equity Net Sales has seen a sharp downtick of 22 per cent largely on account of higher redemptions by 5k cr in May'25 (viz April'25). This was probably due to the war-like situation in the beginning of the month leading to sentiment being cautious," executive director & chief business officer, Motilal Oswal AMC Akhil Chaturvedi, told ANI. Largecap funds experienced the strongest impact, with net inflows reducing by 53.19 per cent to Rs 1,250 crore in May, from Rs 2,671 crore in April, while midcap and small-cap funds also experienced decreases of 15.25 per cent and 19.64 per cent, respectively. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Giao dịch vàng CFDs với mức chênh lệch giá thấp nhất IC Markets Đăng ký Undo Mid-cap fund inflows reduced to Rs 2808.7 crore in May from Rs 3,313 crore in April whilst small-cap funds inflows decreased to Rs 3,214 crore in May from Rs 3,999.95 crore in April. This reduction indicates a possible pause in retail participation due to concerns regarding elevated mid- and small-cap valuations. SIP contribution remained stable in May at Rs 26,688 crore compared to Rs 26,632 crore in April, demonstrating continued retail investor confidence in systematic investments. "SIP numbers over 26000 cr is very encouraging, which implies that the fresh investment preferred route has been SIP than lumpsum" Chaturvedi added. Regarding debt investments, debt mutual funds recorded net outflows of Rs 15,908 crore, contrasting with Rs 2.19 lakh crore net inflow in April. Liquid funds (Rs 40,205 crore) and overnight funds (Rs 8,120 crore) experienced major outflows. Corporate bond funds and money market funds attracted net inflows of Rs 11,983 crore and Rs 11,223 crore, respectively. Despite reduced equity and debt inflows, the mutual fund industry's overall AUM increased to Rs72.20 lakh crore, up from Rs 69.99 lakh crore in April, supported by market appreciation and steady SIP contributions. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Hans India
2 days ago
- Business
- Hans India
SIP inflows hit all-time high of Rs 26,688 crore in May
New Delhi: Systematic Investment Plan (SIP) inflows reached an all-time high of Rs 26,688 crore in May, from Rs 26,632 crore in April, according to data released by the Association of Mutual Funds in India (AMFI) on Tuesday. The highest-ever inflow of SIP shows that people are investing in mutual funds from a long-term perspective. According to the AMFI data, the number of contributing SIP accounts increased to 8.56 crore in May, from 8.38 crore in the previous month. "Investor preferences are evolving. There's a clear lean toward equity and hybrid funds, driven by long-term growth outlooks and a cautious stance on debt. Retail participation is also surging. The mutual fund revolution is becoming mainstream," said Narender Singh, smallcase Manager and Founder of Growth Investing. The total assets under management (AUM) under SIP rose from Rs 13.90 lakh crore in April to Rs 14.61 lakh crore. SIP AUM was around 20.24 per cent of the total AUM of the mutual fund industry in May --- from 19.9 per cent in April. According to the AMFI data, the SIP stoppage ratio weakened in May. About 59 lakh SIP accounts were closed in May, while SIPs were closed or matured for 43 lakh accounts. The total number of SIP accounts in May was 9.06 crore. 'SIP numbers over Rs 26,000 crore is very encouraging, which implies that the fresh investment preferred route has been SIP than lumpsum,' said Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal AMC. Meanwhile, Assets Under Management (AUM) for equity mutual funds rose to Rs 72.2 lakh crore in May, up 4.85 per cent from nearly Rs 70 lakh crore in April. Investors are staying invested, but becoming selective. Equity flows are slowing, debt is stabilising, and hybrid/passive categories are thriving. Market momentum and SIP discipline continue to support AUM growth, said analysts.
