9 equity mutual fund categories attract inflows in May; flexicap funds lead the pack

Equity mutual fund inflows declined 40% to Rs 22,907 crore in May against Rs 38,440 crore in April. Around nine equity mutual fund categories received inflows and two saw an outflow. Here is a detailed breakup: (Source: AMFI Data)

Flexicap funds received the highest inflow in May of Rs 5,175 crore against an inflow of Rs 10,147 crore witnessing a decline of 49% on a monthly basis. “The category's enduring appeal reflects investors' preference for diversified strategies that provide fund managers the flexibility to dynamically allocate across market capitalisations depending on prevailing opportunities and risks,” said Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India.

Smallcap funds and midcaps received an inflow of Rs 4,945 crore and Rs 4,385 crore respectively in May. On a monthly basis, these categories saw a decline of 28% and 33% respectively.
“Although both categories witnessed lower inflows compared with April, the continued positive traction suggests that investors remain constructive on the long-term earnings potential of emerging businesses and are willing to maintain exposure to higher-growth segments despite valuation-related concerns,” said Srivastava.

Large & midcap funds received an inflow of Rs 3,278 crore in May witnessing a decline of 27% on monthly basis from an inflow of Rs 4,490 crore in April.

Multicap funds received an inflow of Rs 2,291 crore in May witnessing a decline of 40% on monthly basis from an inflow of Rs 3,806 crore in April.

Largecap funds received an inflow of Rs 1,592 crore in May witnessing a decline of 37% on monthly basis from an inflow of Rs 2,524 crore in April.

Focused funds received an inflow of Rs 830 crore in May witnessing a decline of 31% on monthly basis from an inflow of Rs 1,194 crore in April.

Sectoral and thematic funds received an inflow of Rs 647 crore in May registering a decline of 67% from an inflow of Rs 1,949 crore in April. “Sectoral and thematic funds, in particular, saw inflows decline to INR 648 crore from nearly INR 1,994 crore in April, suggesting some cooling of enthusiasm towards tactical allocations,” said Srivastava.

Value/contra funds received an inflow of Rs 509 crore in May witnessing a decline of 66% on monthly basis from an inflow of Rs 1,478 crore in April.

ELSS funds and dividend yield funds saw an outflow of Rs 650 crore and Rs 97 crore respectively in May. “Dividend yield funds and ELSS remained the only categories to witness net outflows during the month. The continued outflows from ELSS funds are not entirely surprising, as the category has been witnessing structural headwinds following the reduced attractiveness of tax-saving investments under the new tax regime,” Srivastava said.