Flows into systematic investment plans (SIPs) hit an all-time high of Rs 26,688.22 crore in May with 85.6 million contributing accounts, data from the Association of Mutual Funds in India (Amfi) showed on Tuesday.
“The growth of SIP is particularly encouraging, indicating a shift towards disciplined, long-term investment, said Venkat Nageswar Chalasani, chief executive at Amfi.
Net inflows into open-ended schemes significantly fell to Rs 29,572.98 crore, compared with Rs 2.78 lakh crore in April, due to net outflows of Rs 15,908.48 crore from debt funds and with infusions into equity falling to more than one-year low.
On debt funds, Harshad Patwardhan, chief investment officer at Union Asset Management Company, said outflows were mainly at the shorter end of maturity as monetary easing was widely expected. “Corporate bond funds was the only category to see a big jump in net inflows as investors positioned themselves ahead of the policy announcement,” he added. The category saw inflows of Rs 11,983.35 crore, the highest among debt funds, followed by Rs 11,223.08 crore in money market funds.
After two consecutive months of outflows, gold ETFs witnessed inflows of Rs 291.91 crore and thematic funds rose 2.6% month-on-month to Rs 2,052 crore.
Akhil Chaturvedi, executive director & chief business officer, Motilal Oswal AMC, said: “Equity net sales have seen a sharp downtick of 22%, largely on account of higher redemptions by Rs 5,000 cr in May (viz April’25).”
This was probably due to India-Pakistan conflicts at the beginning of the month, leading to the sentiment being cautious. SIP numbers of over Rs 26,000 crore are very encouraging, which imply that the preferred route for fresh investments has been SIP, rather than lump sum,” Chaturvedi said.
Suranjana Borthakur, head of distribution & strategic alliances, Mirae Asset Investment Managers (India), noted, “What’s particularly encouraging is the rise in hybrid categories — especially arbitrage, BAFs and multi-asset funds— indicating that investors are using these as strategic tools to stay invested while managing short-term volatility.”
She said arbitrage funds, in particular, are being seen as a safe space to temporarily park funds ahead of further deployment. “Overall, investors appear to be making balanced and thoughtful allocation decisions across asset classes, aligned with their risk appetite and investment horizons.”