India's MF assets at Rs 58.6 trillion in May, up nearly Rs 10 trn in a year

India's mutual fund assets rose to Rs 58.6 trillion ($701.90 billion) in May, inching closer to adding Rs 10 trillion in less than a year, the fastest rise on record, data showed on Monday.
 

While the fund industry took five decades to build the first Rs 10 trillion of assets since its inception in 1964, it has added the last Rs 9 trillion of assets in less than six months.
 

Inflows into equity mutual funds rose 83 per cent month-on-month to Rs 34,967 crore last month, with investors continuing to prefer small- and mid-caps, according to data from the Association of Mutual Funds in India (AMFI).
 

Net equity mutual fund inflows in May are the highest on record since April 2019, when AMFI started reporting monthly mutual fund flows in the current format.
 

Domestic equity mutual funds have seen net inflows every month since February 2021, aggregating Rs 5.58 trillion, well above net foreign inflows over the same period.
 

The benchmark NSE Nifty 50 has risen about 55 per cent over these last 39 months, aided by mutual fund inflows.
 

Despite concerns over high valuations, inflows into small-caps rose 23.4 per cent to Rs 2,725 crore in May, while mid-cap fund inflows increased 45.3 per cent to Rs 2,606 crore.
 

Meanwhile, large-caps saw inflows almost double to Rs 663 crore.
 

"Over the last year, small- and mid-cap categories attracted significant inflows due to their growth potential," said Feroze Azeez, deputy chief executive at Anand Rathi Wealth.
 

"Stress tests have indicated that there is no liquidity stress in the two categories, comforting investors and spurring continuous allocations," added Azeez.
 

The benchmark Nifty 50 and small-cap shed 0.33 per cent and 1.85 per cent in May, respectively, while mid-caps rose 1.65%.
 

Meanwhile, contributions to systematic investment plans (SIPs) touched a record high of Rs 20,904 crore in May.
 

Sectoral and thematic fund inflows hit a record Rs 19,213 crore in May, aided by interest in New Fund Offers (NFOs).

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