It is also the third consecutive monthly entry after the net entry of Rs 3,437 crore seen in April and Rs 9,115 crore in March, data from the Association of Mutual Funds of India (Amfi ).
Previously, equity plans had steadily experienced exits for eight consecutive months, from July 2020 to February 2021.
“With stock markets reaching all-time highs, investors have continued to prefer mutual funds and this trend may continue in the months to come,” said Gopal Kavalireddi, head of research at FYERS.
Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said that a significant improvement in the coronavirus situation with daily COVID-19 cases falling steadily, as well as an improvement in the recovery rate, over the past few years. weeks, would have reassured investors.
“Strong quarterly results, a positive long-term earnings growth outlook and diminishing concerns about any serious impact of the second wave of the pandemic on the economy would also have boosted sentiments. This would have prompted investors to reallocate their assets to stocks, “he added.
The decrease in COVID cases and the gradual opening of the economy and forecast of normal precipitation may be a contributing factor to the staggering influx of stocks in May, said Priti Rathi Gupta, founder of LXME.
According to the data, inflows of equity and equity-linked variable-capital schemes were Rs 10,083 crore in May. It was the highest inflow since March 2020, when stock programs recorded a net infusion of Rs 11,723 crore.
With the exception of stock linked savings plans (ELSS), which saw a withdrawal of Rs 290 crore, all stock plans saw an influx last month.
In the equity fund categories, multicap funds recorded the largest net inflow at Rs 1,954 crore. This was followed by a net inflow of Rs 1,368 crore into mid cap funds.
“Investors who have accumulated greater savings over the past year due to reduced spending and who have stayed on the sidelines are slowly coming back. Strong equity returns and market stability despite the second wave provide the much needed positive boost, ”Arun Kumar, head of research at FundsIndia, said.
With stock markets reaching historic highs, small and mid cap segments continued to be favored by investors, with the category posting positive flows for the 3rd consecutive month, Gautam Kalia, Head – Investment Solutions, Sharekhan by
, mentionned.
In addition to stocks, investors invested Rs 6,217 crore in hybrid funds during the month under review. This included Rs 4,521 crore in arbitrage funds.
The contribution to systematic investment plans (SIP) was strong at Rs 8,819 crore in May against Rs 8,596 crore the previous month. In addition, SIP folios also increased to 3.85 crore at the end of May from 3.76 crore at the end of April.
“The retail equity-focused contribution continues to be on the rise thanks to net flows primarily in arbitrage, multicap and midcap programs, as well as smart diversification into fund-of-fund programs that invest in equities. foreign, ”said NS Venkatesh, Managing Director of Amfi. .
In addition, gold exchange traded funds (ETFs) recorded a net inflow of Rs 288 crore last month, up from Rs 680 crore in April.
On the flip side, investors withdrew Rs 44,512 crore from debt mutual funds last month after infusing more than Rs 1 lakh crore in April.
The outflows in the debt category were mainly due to liquid funds, which saw a withdrawal of Rs 45,447 crore, followed by overnight funds at Rs 11,573 crore.
Overall, the mutual fund industry saw an outflow of Rs 38,602 crore across all segments during the period under review, compared to an inflow of Rs 92,906 crore in April.
The mutual fund industry’s assets under management (AUM) hit a record high of Rs 33 lakh crore at the end of May, against Rs 32.38 lakh crore at the end of April.
“Retail SIP Accounts, SIP AUMs and SIP Contribution which means that retail activity in the mutual fund industry has seen a continuous upward trend for the second month of this fiscal year, leading to a record high of Rs 33.05 lakh crore and 10 crore folios, ”said Venkatesh of Amfi.
