India MF Tracker - Equity Inflows Accelerate Amid Volatilities In May, Supported By Higher NFOs: Motilal Oswal

Motilal Oswal Report

The Nifty, after scaling a new high of 23,111 in May 2024, ended its three-month winning streak. The index oscillated 1,290 points before closing 74 points (or 0.3%) lower month-on-month at 22,531. Domestic institutional investors recorded the tenth consecutive month of inflows in May-24 at $6.7 billion, while FIIs reported outflows of $3 billion.

Equity AUM for domestic MFs (including ELSS and index funds) increased 2.7% MoM to Rs 27.7 trillion in May-24 despite a weak market sentiment (with Nifty marginally declining 0.3% MoM). This rise in equity AUM was due to higher NFOs launched by mutual fund houses versus the previous month, which led to an increase in equity scheme sales (up 20.4% MoM to Rs 788 billion).

At the same time, redemptions decreased 1% MoM to Rs 396 billion. Consequently, net inflows rose significantly to Rs 392 billion in May-24 from Rs 254 billion in Apr-24.

Total AUM of the MF industry rose 2.9% MoM to Rs 58.9 trillion in May-24, driven by a MoM increase in AUM for equities (Rs 721 billion), liquid (Rs 382 billion), other ETFs (Rs 153 billion), income (Rs 150 billion), and arbitrage (Rs 144 billion) funds.

Investors continued to park their money in mutual funds, with inflows and contributions in systematic investment plans reaching a new peak of Rs 209 billion in May-24 (up 2.6% MoM and 41.7% YoY).

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