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May was extraordinary for the MF industry. While the MF industry’s AUM reached close to Rs.58.59 lakh crore, the total equity inflows also touched Rs.34,700 crore in May.
This is the 39th times in a row that the industry witnessed positive flows in equity funds. Also, the gross SIP inflows reached Rs.21,000 crore in May.
Overall, the industry witnessed total inflows of Rs.1.10 lakh crore. A drop from last month where the industry seen net inflows of Rs.2.40 lakh crore.
Here are the other key data points for the month of May 2024:
Equity funds
- Equity inflows increased from Rs.19,000 crore in April 2024 to Rs.35,000 crore in May 2024
- Sectoral/thematic funds received the highest inflows of Rs.19,000 crore in May 2024, a jump of 4X from April 2024. This is followed by flexicap funds (Rs.3,000 crore), small cap funds (Rs. 2,700 crore) and multi cap funds (Rs.2,600 crore)
- Large caps funds saw net inflows of Rs.660 crore, an increase from Rs.350 crore in April 2024
- Barring focused funds and ELSS, all categories in equity received net inflows
Debt funds
- Inflows decreased from Rs.1.89 lakh crore to Rs.42,000 crore, largely due to the reduced inflows from liquid funds
- Liquid funds alone saw its inflows declining from Rs.1 lakh crore in April 2024 to Rs. 26,000 crore in May 2024
- Money market funds and overnight funds witnessed next highest inflows of Rs.8,000 crore and Rs.6,000 crore, respectively
- Of the 16 debt funds categories, 6 received new outflows. These 6 are short duration, medium duration, dynamic bond, credit risk, gilt and floater funds
Hybrid funds
- Total inflows in hybrid funds decreased marginally from Rs.20,000 crore in April 2024 to Rs.18,000 crore in May 2024
- Apart from conservative hybrid fund, all categories received net inflows
- Among hybrid funds, arbitrage funds received the highest net inflows to the tune of Rs.3,000 crore followed by multi asset allocation funds with net inflows of Rs. 3,000 crore
Index funds and ETFs
- Both index funds and ETFs saw net inflows
- Index funds reported a decrease in inflows to Rs.4,500 crore in May 2024 from Rs. 6,500 crore in April 2024
- However, the net inflows in ETFs (gold and others) increased. Gold ETFs saw inflows of Rs.800 crore and other ETFs inflows witnessed inflows of Rs. 10,700 crore in May 2024
Other key highlights
- The mutual fund folio count was at Rs.18.16 crore in May 2024. Of this, retail folio count across equity, hybrid and solution-oriented schemes was Rs.14.89 crore
- The SIP AUM reached Rs.11.52 crore and the total SIP accounts stood at Rs.8.75 crore
- 49 lakh new SIPs were registered in May 2024
- 9 schemes were launched in May raising a total of Rs.10,140 crore
What do experts have to say?
Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC
May 2024's record-breaking equity mutual fund inflows reveal a strategic shift by investors towards higher growth opportunities. The surge was significantly driven by sectoral and thematic funds and robust investments in small and mid-cap segments. This suggests a strong investor belief in the potential for sector-specific and smaller companies’ growth. The significant decline in fixed-income inflows further highlights this pivot towards equities, reflecting an optimistic market outlook amidst current economic conditions.
Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC
Record inflows were aided by NFO listings and investors taking advantage of volatility to add equity schemes to their investments through SIPs as well as lumpsum.
Mayukh Dutta, Chief Business Officer, ITI Mutual Fund
This increase can be attributed to the 119% growth in gross inflows into sectoral equity schemes which can be attributed to NFOs. On the debt side, liquid and money market categories got net inflows showing preference for low duration scheme categories. In the hybrid space, arbitrage funds continued their good run and had gross inflows of Rs. 30795 crore in May and net inflows of Rs.12,758 crore.
Venkat Chalasani, Chief Executive, AMFI
Political stability creates an environment conducive to sustainable economic growth, attracting investments and fostering long-term investments. Global growth is sustaining its momentum in 2024 and is likely to remain resilient, supported by rebound in global trade. The overall outlook for Indian capital markets remains positive, supported by strong fundamentals and favourable demographics.
