Equity mutual funds saw a sharp slowdown in inflows in May, falling to their lowest level in a year as geopolitical tensions in West Asia, rising crude oil prices and market volatility weighed on investor sentiment, according to data released by the Association of Mutual Funds in India (AMFI).Net inflows into equity schemes stood at Rs 22,908 crore in May, down 40% from Rs 38,440 crore in April. This was also the weakest monthly inflow since May 2025, when the segment had attracted Rs 19,013 crore.The moderation comes amid heightened uncertainty linked to the Iran-related conflict and its impact on global oil prices, which has triggered cautious positioning among investors, analysts said.
SIP flows remain steady despite slowdown
Monthly Systematic Investment Plan (SIP) contributions saw a marginal decline to Rs 30,954 crore in May from Rs 31,115 crore in April.SIP assets under management rose to Rs 17.12 lakh crore, accounting for nearly 21% of the industry’s total AUM, according to AMFI data.Experts said SIP flows continued to provide stability to the market even as lump-sum inflows slowed due to volatility and global uncertainty.
Broader mutual fund industry sees outflows
Overall, the mutual fund industry recorded net outflows of over Rs 64,000 crore in May, compared to inflows of Rs 3.22 lakh crore in April.The reversal was largely driven by heavy withdrawals of nearly Rs 96,948 crore from debt-oriented schemes, as per news agency PTI.As a result, the industry’s total Assets Under Management (AUM) declined to Rs 81.6 lakh crore at the end of May from Rs 81.92 lakh crore in April.AMFI chief executive Venkat Chalasani attributed the moderation to global uncertainty and commodity price volatility.
Equity categories see broad-based moderation
Within equity mutual funds, inflows declined across most segments. Flexi Cap funds led with Rs 5,175 crore, followed by Small Cap funds at Rs 4,945 crore, Mid Cap funds at Rs 4,385 crore, and Large Cap funds at Rs 1,593 crore. All categories recorded lower inflows compared to April.Dividend Yield Funds and Equity Linked Savings Schemes (ELSS) saw net outflows during the month.
Gold ETFs , debt funds see sharp shifts
Gold Exchange Traded Funds (ETFs) recorded net outflows of Rs 725 crore in May, compared to inflows of Rs 3,040 crore in April.This marked the first instance of outflows in 2026, with analysts attributing the trend to profit booking after a rally in gold prices and shifting risk appetite.Debt mutual fund categories also witnessed a steep reversal, with net outflows of Rs 96,949 crore in May following strong inflows of Rs 2.5 lakh crore in April.Liquid, money market and overnight funds led the withdrawals.
Global volatility, crude prices weigh on sentiment
Small-cap, mid-cap and large-cap fund inflows declined between 28% and 37%, reflecting broad-based weakness across segments.Experts cited by AMFI said crude hovering near $100 a barrel and global uncertainty have prompted investors to adopt a wait-and-watch approach, particularly in riskier equity segments.Despite the slowdown, SIPs remained a key pillar of retail participation, helping cushion broader outflows from the mutual fund industry.
