Mutual fund AUM surges to ₹58.9 lakh cr in May; inflows in equity MF hit all-time high

The Indian mutual fund industry is witnessing strong growth in assets under management (AUM), thanks to record-breaking inflows through systematic investment plans (SIPs) and equity routes. The mutual fund industry’s net AUM climbed to ₹58.91 lakh crore in May 2024, up 2.88% or ₹1.65 lakh crore over the previous month, as per the latest data released by the Association of Mutual Funds of India (AMFI) today.

As per AMFI data, the industry trade body for mutual funds, equity mutual fund inflows jumped 83.42% to a record high of ₹34,697 crore in May, while contributions to SIPs, which primarily comprises of retail money, touched an all-time high of ₹20,904 crore last month.

The net inflow into equity mutual funds was the highest since April 2019, when AMFI started releasing monthly mutual fund flows in the current format. Besides, equity MFs registered 39 months of positive inflows, starting from March 2021.

On the flip side, inflows in debt oriented schemes remained muted during May 2024. The inflows to Debt-oriented schemes dropped to the tune of ₹42,300 crore compared to ₹1,90,000 crore in April 2024.

The data showed that the number of new SIPs registered in May 2024 stood at 49,74,400. During the month under review, the SIP AUM hit the highest ever mark of ₹11.53 lakh crore as against ₹11.26 lakh crore in April 2024. The number of SIP accounts touched fresh record high of 8,75,89,485 in May 2024 compared to 8,70,11,401 in April 2024.

“The mutual fund industry continues its upward trajectory. The Net AUM stands at ₹58.91 lakh crore in May 2024, marking a significant growth of ₹1.65 Lakh crore over the previous month. An all-time high record of ₹20,904.37 crores in SIP contribution, a peak of 8.76 crore SIP accounts, and 39 months of positive equity inflows highlight that the industry is set for continued expansion. Systematic investment plans (SIPs) account for 19% of the net flows, says Venkat Chalasani, Chief Executive, AMFI.

Chalasani further adds that equity mutual funds saw the highest monthly net flows in the category on record for category, up 83% from April. “The net flows in equity oriented mutual funds, took the segment past the ₹25 lakh crore mark, to close at their record high of ₹25.39 lakh crore in May 2024.”

The strong performance of Indian MF industry was attributed to political stability, which created an environment conducive to sustainable economic growth, attracting investments and fostering long-term investments.

“Global growth is sustaining its momentum in 2024 and is likely to remain resilient, supported by rebound in global trade. The overall outlook for Indian capital markets remains positive, supported by strong fundamentals, and favourable demographics,” says Chalasani.

During the month under review, domestic equity mutual funds witnessed strong inflows in small and midcaps, while largecap funds received muted response from investors. The net inflows in small and midcap funds were ₹2,724.67 crore and ₹2,605.70 crore, respectively, while large-cap funds saw net investments of ₹663.09 crore.

Viraj Gandhi, CEO of SAMCO Mutual Fund, says that MF AUM in midcap has surpassed the largecap AUM for the first time. “Even the proportion of Smallcap to Largecap is at its highest peak. This shows where the party is going on in the MF industry.”

Meanwhile, Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC says that the record-breaking equity mutual fund inflows in May reveal a strategic shift by investors towards higher growth opportunities. “The surge was significantly driven by sectoral and thematic funds and robust investments in small and mid-cap segments. This suggests a strong investor belief in the potential for sector-specific and smaller companies’ growth. The significant decline in fixed-income inflows further highlights this pivot towards equities, reflecting an optimistic market outlook amidst current economic conditions.”

As per AMFI data, a total of 9 schemes were launched in the month of May, in the category of open-ended scheme, raising a total of ₹ 10,140 crore.