Equity mutual funds witness 15 straight months of inflow

Amid heightened volatility in stock markets and consistent selling by foreign portfolio investors (FPIs), equity mutual funds witnessed a net inflow of Rs 18,529 crore in May — gaining for the 15^th straight month.

This was much higher compared to a net inflow of Rs 15,890 crore in April, according to the data from the Association of Mutual Funds in India (AMFI).

Mutual funds' net assets under management (AUMs) rose to Rs 38.03 lakh crore in May sequentially.

All the equity-oriented categories received net inflows in May, with flexi cap funds category being the biggest beneficiary with a net inflow of Rs 2,939 crore.

Exchange-traded funds (ETFs) saw an inflow of Rs 5785.43 crore last month. Meanwhile, hybrid funds inflow declined to Rs 5,123.2 crore during the month, down from Rs 7,240 in April, as per AMFI data.

Sunil Subramaniam, MD & CEO at Sundaram Mutual Fund, thinks that equity remains the best asset class, and the AMFI numbers show the maturity of the Indian retail investors.

"I would say these numbers continue to reflect the maturity of the Indian retail investor. They're not panicking in terms of the volatility that's being seen in the markets consequent to what's happening in the rest of the world. And I think that they're sticking to their core thing of looking at equity as the best asset class," he said.

"I think that equity remains the best asset class because from our perspective of the alternatives, while fixed deposit rates are gently starting to creep up following the RBI policy, you will still find a big Delta on a post-tax between high single-digit equity returns, could handsomely beat, post-tax fixed deposit kind of returns, that confidence remains with the investor," added Subramaniam.

Inflow through SIP (Systematic Investment Plan) rose to Rs 12,286 crore in May from Rs 11,863 crore in April, indicating that retail investors continue to hold confidence in equity investments. This is the ninth consecutive month of SIP inflow being greater than Rs 10,000 crore, a trend which started in September 2021 with Rs.10,351 crore inflow.

Apart from equity, the gold exchange-traded funds (ETFs) category saw an inflow of Rs 203 crore.