mutual fundImage Credit source: ai generated
The month of May has been a bit slow for the Indian mutual fund market. According to the latest data from the Association of Mutual Funds in India (AMFI), there has been a huge decline of 40 percent in inflows into equity mutual funds during May on a month-on-month basis. While investors had put a record Rs 38,440 crore in equity funds in April, this figure came down to Rs 22,907 crore in May. However, if compared with the same period last year, the long term trend is positive. There has been an increase of 20 percent in investment on an annual basis, as in May 2025 this figure was Rs 19,013 crore.
Investment decreased in smallcap midcap
The mood of investors was seen to be changed in different categories of the market. Out of the total 11 sub-categories, flexi cap funds have consistently remained the most favorite of investors. This category attracted the highest investment of Rs 5,175 crore in May, although this is much less than April’s record inflow of Rs 10,147 crore.
Small cap funds betting on small and medium stocks received investments of Rs 4,945 crore in May, while mid cap funds received Rs 4,385 crore. The thing to note is that compared to last month, small cap has declined by 28 percent and mid cap has declined by 33 percent. Investment in large cap funds with large shares also declined by 37 per cent to Rs 1,592 crore, which was Rs 2,524 crore in April. Apart from this, net outflows of Rs 650 crore were seen from tax-saving ELSS funds and Rs 97 crore from dividend yield funds.
Investors withdrew huge money from debt funds
There was a lot of turmoil in May on the front of fixed income or debt mutual funds. There has been a huge outflow of Rs 96,948 crore from this entire category during the month of May. This situation is in complete contrast to April, when there was a huge investment of Rs 2.47 lakh crore in debt funds. Barring credit risk funds, institutional and large investors have pulled out money from almost all debt categories.
In this, the biggest hit was on liquid funds, from where Rs 29,680 crore were withdrawn. After this, a withdrawal of Rs 24,691 crore was recorded from money market funds and Rs 15,524 crore from overnight funds. Amidst this entire drought, credit risk funds were the only category that attracted investors and saw a modest inflow of Rs 49.46 crore.
Hybrid schemes have lost their shine
Investors’ enthusiasm for hybrid funds, which invest in a mix of shares and debt, also halved this month. Monthly investment in hybrid funds fell by 49 percent to Rs 10,560 crore, which was Rs 20,565 crore in April. Among the six sub-categories of hybrid, arbitrage funds topped with Rs 5,697 crore, while multi-asset allocation funds collected Rs 3,928 crore. There was investment of Rs 655 crore in aggressive hybrid funds, Rs 181 crore in balanced advantage funds, Rs 75 crore in equity savings funds and only Rs 22 crore in conservative hybrid funds.
On the other hand, investment in other schemes like passive funds and gold ETFs witnessed a historic decline of 98 per cent to just Rs 361 crore. Gold ETF, considered a safe investment, witnessed a withdrawal of Rs 725 crore in May, whereas last month it had received Rs 3,040 crore. Rs 620 crore were also withdrawn from other ETFs, although investments of Rs 943 crore came in index funds and Rs 763 crore in foreign fund of funds.
Net withdrawal of Rs 62,848 crore
Talking about the entire mutual fund market, there was a total net withdrawal of Rs 62,848 crore from open-ended mutual funds in May, due to which the total asset under management (AUM) declined marginally to Rs 81.38 lakh crore, which was at the level of Rs 81.71 lakh crore in April. However, amid this slowdown, 13 new open-ended funds (NFOs) were launched in May, which together raised Rs 471 crore. In this, Motilal Oswal Contra Fund was the biggest contributor, which alone collected Rs 267 crore.
Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsh advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
