Equity mutual funds saw the highest inflow for 38 months, starting from March 2021 and stood at Rs 34,697 crore, according to data by the Association of Mutual Funds in India (AMFI).
"Equity mutual funds saw inflows of Rs 34,697 crore in May, the highest monthly net flows in the category, up 83 per cent from April. The net flows in equity oriented mutual funds, took the segment past the Rs 25 lakh crore mark, to close at their record high of Rs 25.39 lakh crore in May 2024," says Venkat Chalasani, Chief Executive, AMFI.
In May 2024, the net assets under management (AUM) of the mutual fund industry reached Rs 58,91,160.48 crores, marking an increase from Rs 57,25,897.98 crores in April 2024.
"Despite potential high volatility from FII selling, ongoing general elections, GDP data, and other minor events in May, investors remained steadfast in their pursuit of returns on the back of the Indian growth narrative," says Gopal Kavalireddi, Vice President of Research at FYERS, a stock broking platform.
The Rise Of Sips
Additionally, the month saw a substantial influx of 49,74,400 new systematic investment plans (SIPs), contributing to a record-high SIP AUM of Rs 11,52,801 crores, surpassing the April 2024 figure of Rs 11,26,129 crores. The SIP contributions hit an unprecedented high of Rs 20,904.37 crores, contrasting with April 2024's figure of Rs 20,371.47 crores. Moreover, the number of SIP accounts reached an all-time peak of 8,75,89,485 in May 2024, surpassing the previous count of 8,70,11,401 in April 2024.
Going Forward
"The data shows the maturity of Indian retail investors and their belief in the long-term structural story of India despite the general elections during the month. With the continuity of the existing political regime and policies and on the back of strong corporate earnings, we expect continuity of strong flows from domestic MF investors," says Madhu Nair, Chief Executive Officer at Union Mutual Fund.
While the return of the incumbent government bolstered confidence in the continuation of economic policies and widespread reforms implemented over the last ten years, the largest party's lack of a clear majority has tempered enthusiasm to an extent. "Although coalition governments face challenges in consensus building and decision-making, infrastructure and nation-first initiatives introduced earlier are likely to receive support from allies across the political spectrum," says Kavalireddi.
So, the party is expected to continue.
