India’s mutual fund industry witnessed a contrasting trend in May 2025. On one hand, the Systematic Investment Plan (SIP) inflows touched a fresh record high. On the other hand, open-ended equity mutual fund inflows fell sharply. While this may appear contradictory, it highlights the evolving preferences of Indian retail investors.
Let us break down the numbers and see which segments saw growth, where money was pulled out, and how the industry’s assets under management (AUM) responded.
Despite market uncertainties, the SIP route remained the preferred choice for retail investors in May 2025. Monthly SIP inflows rose by 0.21% to reach a new all-time high of ₹26,688 crore, according to data released by the Association of Mutual Funds in India (AMFI).
This sustained growth underscores the resilience of disciplined investing, where investors commit fixed amounts regularly irrespective of market conditions. It reflects growing retail participation and long-term confidence in wealth creation through mutual funds.
Contrary to the rising SIP figures, the net inflow into open-ended equity mutual funds recorded a steep 21.66% decline in May 2025. The total net inflow dropped to ₹19,013.12 crore, marking the lowest figure in the past 1 year.
Small cap mutual funds, which had been attracting heavy inflows in recent months, saw a dip in May. The category recorded a net inflow of ₹3,214.21 crore, lower than the ₹3,999.95 crore received in April.
Similarly, flexi cap funds also experienced a decline. After crossing ₹5,000 crore in net inflows during April, the category received ₹3,841.32 crore in May.
Sectoral and thematic mutual funds recorded a slight rise in inflows. These funds collectively received ₹2,052.48 crore in May, compared to ₹2,000.95 crore in April.
Large cap funds recorded the steepest fall. Inflows dropped by 53.19% to just ₹1,250.47 crore in May.
Read More: How to Make Your First Crore With SIP!
Despite the uneven inflow of data across categories, the mutual fund industry's total assets under management (AUM) crossed the ₹72.20 lakh crore mark for the first time. This is a significant rise from ₹69.99 lakh crore recorded in April.
The rise in AUM may be attributed to market performance in select sectors and continued inflows through SIPs, even as equity funds saw lower contributions.
May 2025 showcased a mixed picture for India’s mutual fund industry. While SIP contributions touched new highs, equity mutual fund inflows saw a notable dip, reflecting changing investor preferences. The continued rise in AUM indicates that investor confidence remains strong, even if allocation patterns are shifting.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Jun 10, 2025, 2:42 PM IST
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