Equity mutual fund inflows in India fell to a 12-month low of Rs 22,908 crore in May, dropping 40% from Rs 38,440 crore in April, as geopolitical tensions in West Asia and rising crude oil prices rattled investor confidence, data from the Association of Mutual Funds in India (AMFI) showed.
Inflow Trends
The May inflow was the weakest since the Rs 19,013 crore recorded in May 2025, according to AMFI. Analysts attributed the moderation to heightened uncertainty linked to the Iran-related conflict and its impact on global oil prices, which prompted cautious positioning among investors. Net inflows into equity schemes were broad-based across categories, with most segments recording lower numbers compared to April.
| Category | May Inflows (Rs crore) | Comparison to April |
|---|---|---|
| Flexi Cap Funds | 5,175 | Lower |
| Small Cap Funds | 4,945 | Lower |
| Mid Cap Funds | 4,385 | Lower |
| Large Cap Funds | 1,593 | Lower |
Dividend Yield Funds and Equity Linked Savings Schemes (ELSS) saw net outflows during the month.
SIP Stability
Despite the lump-sum slowdown, Systematic Investment Plan (SIP) contributions remained resilient, edging down only marginally 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 cited in the report said SIP flows continued to provide stability to the market even as global volatility dampened larger investments.
"SIP flows continued to provide stability to the market even as lump-sum inflows slowed due to volatility and global uncertainty."
Broader Industry Outflows
The mutual fund industry as a whole recorded net outflows of over Rs 64,000 crore in May, a sharp reversal from inflows of Rs 3.22 lakh crore in April. The turnaround was largely driven by heavy withdrawals of nearly Rs 96,948 crore from debt-oriented schemes, as per news agency PTI. Consequently, 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.
Gold and Debt Fund Shifts
Gold Exchange Traded Funds (ETFs) saw net outflows of Rs 725 crore in May, compared to inflows of Rs 3,040 crore in April – the first instance of outflows in 2026. Analysts linked the trend to profit booking after a rally in gold prices and shifting risk appetite. Debt mutual funds reversed sharply, 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.
Implications for International Trade
While the data is domestic, the drivers – geopolitical tensions in West Asia and crude oil prices hovering near $100 per barrel – are directly relevant to international trade. Rising energy costs and supply chain uncertainty can boost import bills for oil-dependent economies like India, affect freight expenses, and alter demand for commodities. The cautious investor sentiment also reflects broader global risk aversion that can influence trade financing and cross-border investment flows. Trade executives should monitor crude price trends and the West Asian conflict timeline for potential cost impacts on logistics and raw material procurement.
What to Watch
Market participants will watch for further AMFI data in June to gauge whether the equity fund slowdown deepens or stabilizes, as well as crude oil price movements and geopolitical developments in West Asia.
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