The dip in large-cap and flexi-cap inflows reflects near-term caution, but attractive valuations in large-caps could lead to renewed interest
FinTech BizNews Service
Mumbai, June 10, 2025: Association of Mutual Funds in India (AMFI) has today released MF industry’s Monthly Data for May, 2025.
A number of representative voices of the MF industry provide analytical insights on the latest AMFI numbers:
Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC:
"Equity Net Sales has seen a sharp downtick of 22% largely on account of higher redemptions by 5kcr in May’25 (viz April’25). This was probably due to the war-like situation in the beginning of the month leading to sentiment being cautious. SIP numbers over 26000cr is very encouraging, which implies that the fresh investment preferred route has been SIP than lumpsum.”
Ms. Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India):
“While equity inflows moderated in May, investor confidence remains strong with SIP contributions holding steady. The dip in large-cap and flexi-cap inflows reflects near-term caution, but attractive valuations in large-caps could lead to renewed interest. Mid- and small-cap flows have also eased slightly, though long-term investor appetite for these segments remains intact. 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. 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.”
Anoop Vijaykumar, Head of equity, Capitalmind MF:
‘‘May’s AMFI numbers tell a story of consolidation rather than concern. Even with a 22 percent month-on-month dip, Rs19,000-plus crore of fresh equity money is the 51st straight month of positive flows—a remarkable show of investor discipline since March 2021.What’s changed is the texture of that flow. Large-cap allocations have cooled sharply as Investors are recalibrating their risk-reward expectations. The relatively modest decline in small and mid-cap inflows suggests that the appetite for growth stories remains intact, though tempered by valuation consciousness. The pause should help earnings catch up with prices and create healthier entry points. Debt-fund outflows of about Rs16,000 crore look tactical—likely driven by treasury cash-management around quarter-end and an RBI policy overhang—rather than a structural shift away from fixed income. What’s most encouraging is the record AUM crossing Rs 72 lakh crore, a fresh peak that underlines the long-term migration of household savings into markets. For investors, the takeaway is clear: stick to systematic plans, rebalance rather than chase performance, and let market volatility work for you instead of against you.”
Dr. Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital:
“Indian investors are becoming more mature and are allocating rationally. Allocations to flexicap and multicap funds continues. While smallcap funds are getting lower allocations due to valuation concerns. Flexicap allocation by the investors allows the fund managers to allocate across the market wherever the opportunities might lie. Sector funds are still getting positive traction but investors should be cautious while allocating being conscious of valuations in the popular sectors. If they pay attention to the PE ratios of the funds they are allocating to it will help rational capital allocation and lower chances of sectoral or thematic bubbles. The outflows from debt funds shows that investors are clear that there is better upside in equities than debt from a interest cutting cycle.”
Pankaj Shrestha, Head - Investment Services, PL Capital: "Equity mutual fund inflows declined 22% month-on-month to Rs19,013 crore in May 2025, suggesting that investors may have booked profits following the recent market rally.
The slowdown in flows was also driven by a shift in investor preference from pure equity funds to hybrid schemes amid market uncertainty and volatility, with hybrid funds recording a 46% month-on-month surge in inflows."
