Indian five hundred rupee banknotes are arranged for a photograph in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Equity Mutual Fund Inflows Drop 10% In May Amid Market Volatility

Inflows into equity mutual funds, including equity-linked savings schemes, declined 9.6 percent in May over the previous month, amid rising volatility.

Total equity inflow during the month stood at Rs 11,346 crore, according to data released by the Association of Mutual Funds in India. Overall, the mutual fund schemes witnessed a net outflow of Rs 50,004 crore in May (month-on-month) compared with an inflow of Rs 1.37 lakh crore in April. That’s because of an outflow worth Rs 46,724 crore in the liquid/money market segment against an inflow Rs 1.16 lakh crore in April in the same segment. Balanced fund flows declined 24 percent sequentially in May to Rs 2,666 crore.

Equity Mutual Fund Inflows Drop 10% In May Amid Market Volatility

“It is good to see net numbers in equity retained in May,” said Swarup Mohanty, chief executive officer at Mirae Asset Global Investments (India) Pvt. Ltd.

Our experience is that investors have always redeemed in volatility. It is good to see the beginning of a reversal of that trend. One creates wealth in equity by accumulating it at all market levels. It is encouraging to see that beginning to happen in our market too.
Swarup Mohanty, CEO, Mirae Asset Global Investments (India)

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Total assets under management declined 3 percent over the previous month in May to Rs 22.6 lakh crore. Equity assets under management declined 7.4 percent to Rs 7.4 lakh crore. Balanced fund assets declined 2 percent during the month to Rs 1.78 lakh crore.

Equity Mutual Fund Inflows Drop 10% In May Amid Market Volatility

“The mutual fund data looks encouraging. We are seeing strong flows through the systematic investment plan route,” said Jinesh Gopani, head of equities at Axis Mutual Fund. “We expect the current level of equity flows to sustain.”

The India VIX Index, a measure of volatility, surged nearly 7 percent in May, reflecting uncertainty over a host of domestic and global factors in the market. The NSE Nifty 50 Index remained flat for the month. The Nifty Pharma Index, the worst sector performer, lost over 9 percent. The Nifty Bank Index bucked the trend rising 5.6 percent.

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