Equity Mutual Fund Inflows Decline Amid Geopolitical Risks, Reaching 12-Month Low of Rs 22,908 Crore in May
Equity mutual funds in India experienced a significant decline in inflows in May, reaching their lowest level in a year. According to data from the Association of Mutual Funds in India (AMFI), net inflows into equity schemes fell to Rs 22,908 crore, a 40% decrease from Rs 38,440 crore in April. This marks the weakest monthly inflow since May 2025, when the segment attracted Rs 19,013 crore. The downturn is attributed to geopolitical tensions in West Asia, rising crude oil prices, and increased market volatility.
SIP Flows Remain Steady Despite Slowdown
Monthly Systematic Investment Plan (SIP) contributions saw a slight decline, totaling Rs 30,954 crore in May, down from Rs 31,115 crore in April. SIP assets under management increased to Rs 17.12 lakh crore, representing nearly 21% of the industry’s total assets. Experts noted that SIP flows continue to provide stability to the market, even as lump-sum inflows have slowed due to ongoing volatility and global uncertainties.
Broader Mutual Fund Industry Sees Outflows
The overall mutual fund industry reported net outflows exceeding Rs 64,000 crore in May, a stark contrast to inflows of Rs 3.22 lakh crore in April. This reversal was primarily driven by substantial withdrawals of nearly Rs 96,948 crore from debt-oriented schemes. Consequently, the industry’s total Assets Under Management (AUM) decreased to Rs 81.6 lakh crore at the end of May, down from Rs 81.92 lakh crore in April. AMFI CEO Venkat Chalasani attributed this moderation to global uncertainty and fluctuations in commodity prices.
Equity Categories See Broad-Based Moderation
Inflows into equity mutual funds declined across most categories in May. Flexi Cap funds led with Rs 5,175 crore, followed by Small Cap funds at Rs 4,945 crore, Mid Cap funds at Rs 4,385 crore, and Large Cap funds at Rs 1,593 crore. All categories reported lower inflows compared to April, with Dividend Yield Funds and Equity Linked Savings Schemes (ELSS) experiencing net outflows during the month.
Gold ETFs, Debt Funds See Sharp Shifts
Gold Exchange Traded Funds (ETFs) recorded net outflows of Rs 725 crore in May, a significant drop from inflows of Rs 3,040 crore in April. This marked the first instance of outflows in 2026, with analysts attributing the trend to profit booking following a rally in gold prices and changing risk appetites. Debt mutual fund categories also faced a steep reversal, with net outflows of Rs 96,949 crore in May after strong inflows of Rs 2.5 lakh crore in April. Withdrawals were led by liquid, money market, and overnight funds.
Global Volatility, Crude Prices Weigh on Sentiment
Inflows into small-cap, mid-cap, and large-cap funds fell between 28% and 37%, indicating widespread weakness across segments. Experts cited by AMFI noted that crude oil prices hovering near $100 a barrel and global uncertainties have led investors to adopt a cautious approach, particularly in riskier equity segments. Despite the slowdown, SIPs continued to play a crucial role in retail participation, helping to mitigate broader outflows from the mutual fund industry.
Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.
