Net inflows into equity mutual fund schemes declined sharply in May, falling to a one-year low of Rs 22,908 crore as volatile market conditions and cautious investor sentiment impacted fresh investments. According to data released by the Association of Mutual Funds in India (AMFI), equity fund inflows dropped nearly 40% from Rs 38,440 crore recorded in April.

Key Highlights

• Equity mutual fund inflows fell 40% month-on-month to Rs 22,908 crore, the lowest in a year.
• Debt fund outflows of ₹96,949 crore pushed the mutual fund industry into net outflows.

The slowdown in equity investments, combined with a sharp reversal in debt fund flows, pushed the mutual fund industry into net outflows of Rs 64,004 crore during May. In comparison, the industry had reported net inflows of Rs 3.22 lakh crore in April.

As a result, the industry's total assets under management (AUM) declined to Rs 81.6 lakh crore at the end of May from ₹81.92 lakh crore a month earlier.

Debt Fund Outflows Weigh on Overall Industry Flows

Debt mutual funds witnessed the most significant shift during the month, recording net outflows of Rs 96,949 crore after attracting inflows of Rs 2.47 lakh crore in April. The sharp turnaround in debt schemes emerged as the primary factor behind the industry's overall negative flows.

Market participants attributed the outflows largely to treasury-related movements and profit-booking by institutional investors following strong inflows in April.

Meanwhile, the category comprising exchange-traded funds (ETFs) and other passive investment products saw inflows of only Rs 362 crore in May, a steep decline from Rs 20,082 crore in April and Rs 30,768 crore in March.

Hybrid Funds Continue to Attract Investors

Despite the broader moderation in fund flows, hybrid mutual funds continued to witness healthy investor participation. The category received net inflows of Rs 10,560 crore in May, although the figure was significantly lower than the Rs 20,565 crore reported in April.

Hybrid schemes have remained popular among investors seeking balanced exposure to both equity and debt markets amid uncertain market conditions.

Gold ETFs, however, experienced a reversal in investor sentiment. The category recorded net outflows of Rs 725 crore during May compared with inflows of Rs 3,040 crore in April. Earlier in the year, Gold ETFs had attracted strong investments, including inflows exceeding Rs 24,000 crore in January.

Also Read: AMFI April 2026 Data Shows Shift Toward Mid, Small-Cap Funds

SIP Contributions Remain Above Rs 30,000 Crore

A key positive trend for the industry was the continued resilience of Systematic Investment Plans (SIPs). Monthly SIP contributions stood at Rs 30,954 crore in May, marginally lower than the record Rs 31,115 crore collected in April.

Although equity mutual fund inflows fell sharply during the month, SIP investments remained above the Rs 30,000-crore mark for the third consecutive month, reflecting investors' commitment to long-term wealth creation through disciplined investing.

Among equity mutual fund categories, Dividend Yield Funds and Equity Linked Savings Schemes (ELSS) were the only segments to register net outflows in May.

The latest AMFI data suggests that while market volatility affected near-term investor sentiment, long-term investment behaviour through SIPs remains largely intact.