Equity mutual funds witnessed the highest inflows in 14 months in May after the markets hit multiple record highs on the back of declining COVID cases and a better than expected economic recovery. This is the third straight month of inflows.
According to Sebi data, MFs put in a net amount of Rs 9,235.50 crore in equities in the month of May, which is the highest since March 2020. The inflow for the Month of April stood at Rs 3,437 crore.
Total assets under management (AUM) also rose to Rs 33.05 lakh crore in May versus Rs 32.38 lakh crore in the previous month.
"It has been a constant few months of equity inflows after a year where there was probably Rs 60,000 crore of outflows. Both the equity and hybrid numbers are very positive. It is a sign that more investor interest continues in mutual funds (MFs)," said Radhika Gupta, MD and CEO of Edelweiss Asset Management.
April and May were pretty turbulent periods with COVID second wave and despite that these are very healthy numbers, Gupta added. She expects the month of June will continue to be positive.
"Our own flows in June looks as good as May or maybe better than May," she stated.
Domestic investors had been taking out money from equity mutual fund schemes since July 2020 and March 2021 was the first month of inflows worth Rs 9,115 crore, the Sebi data showed. These outflows were mainly due to profit-booking by investors amid a rally in stock markets.
However, MFs had invested over Rs 40,200 crore in the first five months (January-May) of 2020. Of this, Rs 30,285 crore was invested in March 2020.
Meanwhile, mutual funds put in nearly Rs 6,217 crore in hybrid funds in the month under review which is less than the Rs 8,641 crore invested in April. However, Liquid funds saw outflows worth Rs 45,441 crore and corporate bond funds saw outflows of Rs 1,468 crore in May. Both these funds witnessed inflows in April.
The total debt scheme also saw an outflow of Rs 44,512 crore in May versus Rs 1 lakh crore inflow in the previous month.
First Published: IST