Stock Inflows and SIPs Rise in May Despite Market Volatility: Amfi Data

NEW DELHI: Open-ended equity mutual funds recorded net inflows of 18,529, up 16.6% sequentially despite market volatility, according to data released Thursday by the Association of Mutual Funds in India (Amfi). Inflows into equity funds have been positive for 15 consecutive months.

This came despite a drop in Indian equity benchmarks in May amid high volatility. The Sensex and Nifty fell around 2.5% each during the month.

Overall, open-ended mutual funds saw net outflows of 7,533 crore against inflows of 72,847 crores in April as the cycle of rising interest rates led investors to redeem their money market investments and low to short duration funds.

In addition, Systematic Investment Plan (SIP) entries from 12,286 crores in May vs. 11,863 crore in April signaled that retail investors continued to have confidence in equity investments.

It is also the ninth month in a row that SIP ingress has exceeded 10,000 crore, the trend that started in September 2021 with 10,351 crores.

“Despite very volatile markets and the Reserve Bank of India‘s interest rate hikes to fight inflation, we are still seeing good numbers in mutual funds, especially in mutual funds,” said NS Venkatesh, Managing Director. , Amfi.

In specific equity segments, large-cap mutual fund inflows increased 97.4% on a monthly basis, equity-linked savings plan (ELSS) inflows increased 143%, and flexi-cap entries increased by 72%.

“Net flows into the balanced hybrid/aggressive hybrid fund category increased by 97%, indicating that with the uncertainties over the economic cycle and rates, investors do not want to be caught off guard and are reallocating their investments based on their risk profile and available opportunities,” said Gopal Kavalireddi, head of research at FYERS, a technology-driven brokerage and investment platform.

According to Amfi data, total assets under management fell 2.1% month-on-month for 37.3 lakh crore, with assets under management (AUM) of debt and equity programs down 2.5% each.

Assets under management for overnight funds increased by 14.4%, while dynamic money market and bond funds recorded a double-digit decrease in their assets under management.

“This decline in AUM was driven by asset price changes in May, where most Nifty indices generated negative returns, Nifty 50 itself down 3.03%. Nifty hit an all-time high in October 2021 and since then it has been stuck in a range, due to various macro and microeconomic factors,” Kavalireddi said.

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