Amid stock market volatility, uncertainty due to the Ukraine-Russia war and high inflation, equity mutual funds (MFs) continued to remain attractive choice for investors for the fifteenth straight month in May. In May 2022, when the Nifty fell below 16,000, inflows (ex- new fund offers or NFOs) increased to ₹18,500 crore as compared to ₹12,800 crore in April, witnessing a 45% jump.
Similar higher inflows were seen in March 2022 as well as in March, April 2020 when markets had fallen. The trend of higher inflows during fall continues, highlighted brokerage ICICI Securities.
All the equity-oriented categories received net inflows in May with flexi cap funds category being the biggest beneficiary with a net inflow of ₹2,939 crore. Systematic investment plan (SIP) inflows continue to trend higher with inflows in May 2022 at ₹12,300 crore.
Mirza International, Maharashtra Scooters, PCBL Ltd, Tatva Chintan Pharma Chem, RBL Bank, JK Paper, Insecticides (India), Route Mobile, Go Fashion (India) and Nazara Technologies were among the top 10 smallcap stocks bought by the fund houses in May, as per brokerage house ICICI Securities’ research report on the mutual fund (MF) activity for the previous month.
On the other hand, Intellect Design Arena, Chennai Petroleum Corporation, Ashiana Housing, The India Cements, Polyplex Corporation, Indiabulls Real Estate, Mastek, Caplin Point Laboratories, Amara Raja Batteries and Jindal Stainless were among the smallcap stocks that top asset management companies (AMCs) sold in the last month.
Overall, the mutual fund industry registered a net withdrawal of ₹7,532 crore last month as compared to a net inflow of ₹72,846 crore in April. The overall outflow pulled down the average assets under management (AUM) of the industry to ₹37.37 lakh crore at the end of May from ₹38.89 lakh crore at April-end, according to data released by the Association of Mutual Funds in India (Amfi).