The Association of Mutual Funds in India (AMFI) reported a 22% decline in equity mutual fund inflows for May 2025, marking the fifth straight month of reduced inflows. Net inflows into equity mutual funds fell to ₹19,013.12 crore from ₹24,269.26 crore in April, a 21.63% drop, despite gains in benchmark indices like the NSE NIFTY 50 (+1.71%) and S&P BSE SENSEX (+1.51%).
Key Trends in Equity Mutual Funds
Equity mutual fund inflows have been on a downward trajectory since January 2025. Here’s a snapshot of recent months:
|
Month |
Net Inflows (₹ crore) |
% Change from Previous Month |
|---|---|---|
|
May 2025 |
19,013.12 |
-21.63% |
|
Apr 2025 |
24,269.26 |
-3.24% |
|
Mar 2025 |
25,082.01 |
-14.41% |
|
Feb 2025 |
29,303.34 |
-26.19% |
|
Jan 2025 |
39,687.78 |
-3.56% |
-
Large-Cap Funds: Inflows dropped to ₹1,250.47 crore in May from ₹2,671.46 crore in April.
-
Mid-Cap Funds: Inflows fell to ₹2,808 crore from ₹3,313 crore in April.
-
Small-Cap Funds: Inflows declined to ₹3,214.21 crore from ₹3,999.95 crore in April.
-
Flexi Cap Funds: Despite a decline, they led inflows at ₹3,841.32 crore, down from ₹5,541.71 crore in April.
-
Sectoral/Thematic Funds: Bucked the trend with inflows rising to ₹2,052.48 crore from ₹2,000.95 crore in April.
-
ELSS Funds: Saw continued outflows of ₹678.11 crore, worsening from ₹372 crore in April.
-
Value & Dividend Yield Funds: Recorded outflows of ₹92 crore and ₹21 crore, respectively.
Debt Funds and ETFs
-
Debt Funds: Witnessed a sharp reversal with outflows of ₹15,908.48 crore in May, compared to inflows of ₹2.2 lakh crore in April.
-
Gold ETFs: Attracted inflows of ₹291.91 crore in May, rebounding from an outflow of ₹5.82 crore in April.
-
Other ETFs: Inflows fell to ₹4,086.81 crore from ₹19,056.66 crore in April.
Market Context and Investor Sentiment
Despite the positive performance of equity indices, the consistent decline in equity mutual fund inflows signals cautious investor sentiment. Factors such as global trade uncertainties and profit-taking in key sectors may be influencing this trend. However, the uptick in gold ETFs suggests investors are seeking safe-haven assets amid market volatility.
What’s Next for Investors?
The persistent decline in equity mutual fund inflows, coupled with significant debt fund outflows, highlights a shift in investor preference. Flexi Cap and sectoral/thematic funds remain attractive for those seeking diversified or targeted exposure. Meanwhile, the resurgence in gold ETFs could indicate a hedge against uncertainty. Investors should monitor upcoming AMFI data and global economic cues to navigate these evolving trends.
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