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Time of India
2 days ago
- Business
- Time of India
Largecap mutual funds see over 50% decline in May inflows. Profit booking or shift in investor preference?
With largecap mutual funds seeing a drop of over 50% in monthly inflows during May 2025, an experts attribute the decline to profit-taking and a shift toward higher-yielding categories. Investors, they say, often chase recent outperformers rather than adhering to a disciplined, goal-based asset allocation strategy. 'The recent stronger returns in mid and small-cap funds may have induced many investors to reallocate in pursuit of higher gains, and their portfolios may have consequently been diverted from their original risk-return profiles,' Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance, shared with ETMutualFunds. Also Read | Midcap and smallcap mutual funds witness decline in inflows. Are investors shifting focus? Play Video Play Skip Backward Skip Forward Mute Current Time 0:00 / Duration 0:00 Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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View Details » Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Belly Fat Removal Without Surgery in Algeria: The Price Might Surprise You Belly Fat Removal | Search Ads Get Info Undo Another expert is of a similar opinion that this tactical shift is for higher growth by choosing riskier categories. '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 a considerable run-up in the months prior,' said Himanshu Srivastava – Associate Director- Manager Research, Morningstar Investment Research India. Live Events In May, large cap funds received total inflows of Rs 1,250 crore against an inflow of Rs 2,671 crore in April, witnessing a decline of nearly 53% on a monthly basis. Yearly, these funds saw a growth of 89% from an inflow of Rs 663 crore in May 2024. As the data reflects a change in investors' preference, the important thing to know is whether it is the correct time to invest in these funds amid the market volatility. According to Minocha, large-cap funds stabilise a portfolio as these funds, even if the volatility for many can be considered low, fit those with medium-risk appetite, but the exact allocation must depend on the individual's goals, time horizon, and risk tolerance. 'Large-cap exposure is a must for every investor. Investors also may look at categories like flexi-cap and large & mid-cap funds, if duly aware of the fund manager's style, in terms of his allocation towards large caps and, to what extent there is participation in mid-cap and small-cap space for generating alpha ,' Minocha further shared with ETMutualFunds. Also Read | Nifty Bank hits 57,000. Is it time for mutual fund investors to bet on banking funds? Largecap funds delivered an average return of 2.22% in May. Among the 33 funds in the category in the said period, Quant Large Cap Fund gave the highest return of around 4% in May, followed by ITI Large Cap Fund, which gave a 3.99% return in the same period. HDFC Large Cap Fund gave the lowest positive return of around 0.95% in the mentioned period. Samco Large Cap Fund was the only fund to deliver negative returns in the mentioned period. The fund lost 0.20% in May. On the other hand, midcap and smallcap funds gave an average return of 5.92% and 8.20% respectively in May, which was slightly higher than the one offered by largecap funds. Midcap funds and smallcap funds received an inflow of Rs 2,808 crore and Rs 3,214 crore, respectively, in May. These funds witnessed a smaller decline on a monthly basis compared to largecap funds. The midcap and smallcap funds witnessed a decline of 15% and 20% respectively on a monthly basis. As the largecap funds lag behind the mid and smallcap funds, Minocha mentions that as these funds invest in the top 100 market-cap companies technically provide long-term stability and resilience to any portfolio, which makes them relevant in the construction of a portfolio. 'Most active management large-cap funds have failed to beat their benchmarks in recent years. Hence, a passive alternative to consider would be Nifty 50, Nifty 100, or even a smart-beta approach (say equal weight or low-volatility indices) for a cost-effective and benchmark exposure,' Minocha shared the outlook of largecap funds with ETMutualFunds. Also Read | Parag Parikh Flexi Cap Fund adds Bharti Airtel and Nesco to its portfolio in May Large-cap funds invest at least 80% of their assets in a large-cap company, which is ranked from 1st to 100th on the Indian stock exchanges in terms of market capitalisation, with the flexibility to invest the balance 20% in other companies as per the discretion of the fund manager. If you are looking for recommendations, see: Best large cap mutual funds to invest in June 2025 ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Hans India
2 days ago
- Business
- Hans India
Gold ETFs rebound in May, record net inflow of Rs 292 crore
New Delhi: Gold exchange-traded funds (ETFs) regained investor interest in May after two months of net withdrawals, the Association of Mutual Funds in India (AMFI) data showed on Tuesday. Gold ETFs recorded a net inflow of Rs 291.91 crore in May 2025, marking an improvement from the marginal outflow of Rs 5.82 crore in April, according to the AMFI data. 'Flows into the category had remained muted over the past two months, following modest outflows in March as well. The renewed traction in May signals a gradual return of investor interest, likely driven by resilient gold prices and sustained global uncertainties that reinforce gold's appeal as a strategic hedge,' said Nehal Meshram, Senior Analyst–Manager Research, Morningstar Investment Research India. The uptick also shows that investors are regaining confidence in gold, as it continues to offer stability amid mixed signals from equity and bond markets. Furthermore, the relative stability in gold prices through May have provided a more attractive entry point for investors looking to build or rebalance allocations toward safer assets. The resurgence in flows also highlights the growing role of Gold ETFs in strategic asset allocation, especially as investors seek to manage risk in an increasingly uncertain investment environment. 'While inflows are yet to reach the levels seen earlier in the year, the trend suggests a gradual and measured return of interest in gold, underpinned by its long-term diversification benefits,' said Meshram. According to Motilal Oswal Private Wealth's May Alpha Strategist Report, in Q1 2025, the gold market experienced a historic surge, with prices reaching record highs amid escalating geopolitical tensions, tariff wars, and a weakening US dollar. The total supply rose modestly, but the soaring price led to a significant increase in market value. Investment demand saw a dramatic 170 per cent on-year rise, driven by a strong rebound in gold ETF inflows, particularly in Europe, Asia, and India.
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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.
Business Recorder
3 days ago
- Business
- Business Recorder
Indian equity mutual fund inflows slump to 13-month low in May despite market gains
Indian equity mutual fund inflows fell to a 13-month low in May, marking the fifth consecutive month of decline, with large-, mid-, and small-cap funds all reporting reduced inflows. Net inflows dropped about 22% month-on-month to 190.13 billion rupees ($2.22 billion), the lowest since April 2024, data from the Association of Mutual Funds in India (AMFI) showed on Tuesday. The decline was driven by a softer market in May after sharp rallies in earlier months, stretched valuations, macro headwinds including India-Pakistan tensions, and global inflation concerns, said Himanshu Srivastava – associate director - manager research, Morningstar Investment Research India. Despite this, India's Nifty 50 rose 1.7% in May, logging a third straight month of gains, supported by the return of foreign buying and improved March-quarter earnings. Foreign portfolio investors (FPI) bought Indian shares worth $2.34 billion in May, the highest monthly inflows since September 2024 when the benchmarks hit record highs. The broader small- and mid-caps jumped 8.7% and 6.1%, respectively, buoyed by foreign buying and a surge in some defense stocks. Inflows into large-cap funds more than halved to 12.5 billion rupees in May, while mid- and small-cap funds saw inflows decline 15% and 20% to 28.09 billion rupees and 32.14 billionrupees, respectively, AMFI data showed. India's mutual funds held an unprecedented 2.15 trillion rupees in cash as of April. Analysts said the record high cash holding indicates that funds may be awaiting more favourable valuations. While overall inflows moderated in May, contributions via systematic investment plans (SIPs) - a mode of investment for mutual fund investors - rose marginally to a record high of 266.88 billion rupees in May. The number of SIP accounts also rose to 85.6 million from 83.8 million in April.
Time of India
3 days ago
- Business
- Time of India
Midcap and smallcap mutual funds witness decline in inflows. Are investors shifting focus?
With mid cap and small cap funds witnessing a decline in inflows in the month of May, experts are of the opinion that 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,' said Himanshu Srivastava – Associate Director- Manager Research, Morningstar Investment Research India. Also Read | Nifty Bank hits 57,000. Is it time for mutual fund investors to bet on banking funds? Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » Mid cap funds received an inflow of Rs 2,808 crore in May against an inflow of Rs 3,313 crore in April registering a decline of 15% on monthly basis. On the other hand, small cap funds received an inflow of Rs 3,214 crore in May against an inflow of Rs 3,999 crore in April witnessing a decline of 20% on the monthly basis. 'Mid- and small-cap flows have also eased slightly, though long-term investor appetite for these segments remains intact,' Suranjana Borthakhur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) said. Live Events On an average, mid cap funds offered a return of 5.92% in the month of May with ICICI Prudential Midcap Fund offering the highest return of around 8.34%, followed by Canara Robeco Mid Cap Fund which gave 8.02% return in May. Quant Mid Cap Fund gave the lowest return of 2.81% in the same period. Small cap funds gave an average return of 8.20% in May with DSP Small Cap Fund emerging as the topper. The fund gave 14.05% return in the said period, followed by Quantum Small Cap Fund which gave 11.06% return in the same period. SBI Small Cap Fund gave the lowest return of 5.88% in May. Also Read | Parag Parikh Flexi Cap Fund adds Bharti Airtel and Nesco to its portfolio in May The expert from Morningstar recommends investors to align their investments in these segments in line with their risk appetite and overall asset allocation and avoid going overboard in them.
