Equity Mutual Fund Inflows Fall for Fifth Straight Month, Hit 13-Month Low at ₹19,013 Crore in May

Indian equity mutual funds continued their downward streak for the fifth month in a row, with net inflows dipping to a 13-month low of ₹19,013 crore in May.

Notably, large-cap funds brought in ₹1,250 crore in May, less than half of what they saw in April. Mid-cap funds also slowed down, collecting ₹2,808 crore in May compared to ₹3,313 crore in April.

Even small-cap funds, which had been going strong, saw inflows ease to ₹3,214 crore, down from ₹3,999 crore in the previous month.

Monthly Flow Trend Of Equity-Oriented Schemes (In ₹ Crore)

Following this broader dip in sentiment, inflows into equity mutual funds dropped 22% to ₹19,013 crore in May, compared to ₹24,269 crore in April

Among the 11 sub-categories, large-cap, mid-cap, and small-cap funds all took a hit, with inflows falling by 53%, 15%, and 20%, respectively.

On a brighter note, flexi-cap funds continued to lead in popularity, drawing the highest inflows at ₹3,841 crore in May, just ahead of small-cap funds.

Conversely, three categories reported net outflows:

• ELSS funds: -₹678 crore
• Value/contra funds: -₹92 crore
• Dividend yield funds: -₹21 crore

 Category-Wise Trends In Equity Funds

Debt Funds

In contrast to equities, open-ended debt mutual funds saw net outflows of ₹15,908 crore in May, a sharp reversal from the massive ₹2.19 lakh crore inflow in April.

Still, the overall assets under management (AUM) for the category held steady, dipping just 0.16% to ₹17.54 lakh crore.

Monthly Flow Trend Of Debt-Oriented Schemes (In ₹ Crore)

Interestingly, despite the outflows, the debt market showed signs of strength. Surplus liquidity, softer-than-expected inflation, and a supportive RBI stance kept bond yields low, even as global yields rose.

The 10-year benchmark G-Sec yield dropped to 6.27% in May from 6.36% in April, reflecting this positive sentiment.

RBI’s bond purchase plan added to the optimism, especially after early-May profit booking. Strong GDP data and a sharp fall in crude prices also helped boost bond prices, though foreign investor sentiment remained cautious due to rising U.S. yields and geopolitical tensions.

Within categories, money market funds saw healthy inflows of ₹11,223 crore, thanks to their relatively better yields. In contrast, liquid funds and overnight funds witnessed outflows of ₹40,223 crore and ₹8,120 crore, respectively.

Meanwhile, corporate bond funds stood out with ₹11,983 crore in inflows and the highest AUM growth at 7.71%, as investors hunted for higher returns by taking on more credit risk.

Hybrid Funds

Hybrid schemes continued to gain traction in May, posting a 46% month-on-month increase in inflows, rising to ₹20,765 crore in May from ₹14,247 crore in April.

Within this category:

• Arbitrage funds dominated with ₹15,702 crore in inflows, a 33% increase over April.
• Multi asset allocation funds and dynamic asset allocation funds also posted strong growth.

Thanks to this momentum, the hybrid segment’s total AUM reached ₹9.55 lakh crore.

 Category-Wise Trends In Hybrid Funds

Passive Funds

The passive segment was a mixed bag in May. On one hand, AUM touched a record high of ₹12.24 lakh crore. But on the other hand, monthly inflows in some categories took a sharp hit.

In particular,

• Other ETFs dropped by 78%
• Index funds declined by 29%

However, Gold ETFs rebounded strongly, with a remarkable 4965% surge in net inflows!

 Category-Wise Trends In Passive Funds

AUM Growth Despite Volatility

Despite the dip in equity inflows and sharp outflows in debt funds, the mutual fund industry’s total net AUM stood at ₹72.20 lakh crore at the end of May, reflecting a monthly growth of 3.04% from April 2025.

Fund Flow Trends Of Open-Ended Schemes In May 2025

In fact, May 2025 was a milestone moment. The industry crossed the ₹70 lakh crore mark for the first time ever!

Market performance played its part too, with the Nifty 50 TRI gaining 1.92% and the BSE 500 TRI up 1.75% during the month, helping lift overall AUM despite mixed flows across categories.

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