Equity inflows, SIPs rise in May despite volatile markets: Amfi data

NEW DELHI: Open-ended equity mutual funds in May registered net inflows of ₹18,529, up 16.6% sequentially despite volatility in markets, according to data released by the Association of Mutual Funds in India (Amfi) on Thursday. Inflows into equity funds have been positive for 15 straight months now.

This came despite a fall in Indian equity benchmarks in May amid a surge in volatility. The Sensex and Nifty fell around 2.5% each during the month.

Overall, open-ended mutual funds saw net outflow of 7,533 crore against inflows of ₹72,847 crore in April, as rising interest rate cycle led to investors redeeming their investments from money market and low to short-duration funds.

Further, systematic investment plan (SIP) inflows of ₹12,286 crore in May against ₹11,863 crore in April indicated that retail investors continued to hold confidence on equity investments.

It was also the ninth consecutive month of SIP inflows being greater than ₹10,000 crore, the trend which started in September 2021 with ₹10,351 crore.

“Despite the markets being very volatile and the interest rate hikes happening from the the Reserve Bank of India to fight inflation, we are still seeing good numbers in the mutual fund, especially in the equity mutual funds,” said N. S. Venkatesh, chief executive officer, Amfi.

In specific equity segments, large-cap mutual funds inflows were up 97.4% on a month-on-month basis, equity-linked savings scheme (ELSS) inflows up 143%, and flexi-cap inflows up 72%.

“Balanced hybrid fund/aggressive hybrid fund category net flows were up 97%, indicating that, with uncertainties on economic and rate cycle, investors don’t want to be caught on the wrong foot and are reallocating their investments based on their risk profile and opportunities available,” said Gopal Kavalireddi, Head of Research at FYERS, a technology focused stock broking and investment platform.

As per Amfi data, total assets under management fell 2.1% month-on-month to ₹37.3 lakh crore, with assets under management (AUM) of debt and equity schemes declining 2.5% each.

Overnight funds’ AUM rose 14.4%, while money market and dynamic bond funds saw a double-digit AUM de-growth.

“This fall in AUM is due to asset price changes in May, where most Nifty indices delivered negative returns, with Nifty 50 itself down by 3.03%. Nifty hit an all-time high in October 2021 and since then has been stuck in a range, owing to various macro and micro economic factors,” said Kavalireddi.