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Equity MFs see net inflows for 3rd straight month in May; SIP inflows rise

Equity MFs see net inflows for 3rd straight month in May; SIP inflows rise

09 Jun 2021

New Delhi: Domestic equity mutual funds saw net inflows for third consecutive month in May as investors are increasingly seeking diversified investment options given surging equity valuations in India.

Equity mutual funds saw net inflows of Rs 10,082 crore in May, data available on the Association of Mutual Funds of India’s website showed.

Interestingly, inflows through systematic investment plans also saw a significant rise at Rs 8,819 crore in May as against Rs 8,596.3 crore in April. The total numbers of active SIP folios rose to 3.88 crore in May from 3.79 crore in April, a net rise of 8.82 lakh folios. SIP AUM grew by Rs 32,625 crore in May to Rs 4,67,366 crore from Rs 4,34,742 crore a month ago.
“Equity inflows have been good and there is nothing to worry about. Investors have preferred mutual funds as their preferred investment vehicles,” Association of Mutual Funds in India Chief Executive Officer NS Venkatesh said.

Overall, the industry continued to see withdrawal of fund with liquid funds and overnight funds leading the outflows in May, AMFI data showed.

The total number of folios crossed the 10 crore mark at 10,04,36,145 in May, Venkatesh said.

Investors withdrew a net of Rs 38,602 crore from mutual funds. Major outflows were seen from liquid funds and overnight funds, where investors redeemed Rs 45,447 crore and Rs 11,573 crore.

“The pandemic is still there and effects of the pandemic are still being felt. June is likely to show negative flows in liquid and overnight funds, as corporates take some money off the table due to quarter end. Things will change July onwards,” said Venkatesh.

Hybrid schemes also showed positive growth, barring balanced hybrid and aggressive hybrid schemes, which witnessed an outflow of Rs 435.21 crore. Index funds saw a positive flow of Rs 1,240 crore. Rs 287 crore came into gold ETFs, Rs 5,379 crore came to other ETFs and Rs 2,423 crore to fund of funds (FoFs), Amfi data showed. “The numbers have been good and the growth is remarkable,” Venkatesh said .

Retail AUM surged to Rs 14,85,574 crore in May, showing a growth of 51 per cent. The total number of folios stood at 8,36,00,141 at the end of May, with total inflows of Rs 15,520 crore. Retail schemes included equity, hybrid and solution-oriented funds. However, closed-ended schemes witnessed an outflow of Rs 18,802.18 crore as many of these schemes matured and investors redeemed money.

Total assets under management of the industry at the end of May stood at Rs 33,05,660 crore, up 35 per cent year-on-year (YoY), whereas the average AUM grew by 36 per cent to Rs 32,99,502 crore.