Hybrid Mutual Fund Inflows Surge 46% in May – Here’s Why

Hybrid mutual funds have continued their strong performance in May 2025, with net inflows jumping to ₹20,765 crore—a sharp 46% increase compared to April’s ₹14,247 crore, according to data from the Association of Mutual Funds in India (AMFI).

This marks a sustained rebound from March, when the category saw net outflows of ₹946 crore.

Hybrid Mutual Fund Inflows Surge in May

The rise in hybrid fund popularity reflects a growing investor appetite for diversification across asset classes—namely equity, debt, and commodities like gold—to manage risk and achieve more stable returns in an unpredictable market environment.

Arbitrage and Multi-Asset Funds Lead the Pack

Within the hybrid category, arbitrage funds stood out with net inflows of ₹15,701 crore in May, up 33% from the previous month. Multi-asset allocation funds also saw significant interest, attracting ₹2,926 crore—marking a 39% increase from April.

 These funds appeal to investors seeking exposure to multiple asset classes under a single umbrella.

Geopolitical Tensions Drive Demand for Safer, Balanced Portfolios

The uptick in hybrid fund inflows comes against a backdrop of elevated global risks, including the ongoing Russia-Ukraine conflict and uncertainty surrounding US trade policy.

Such geopolitical volatility has led investors to prefer funds that can provide some cushion against market swings, as per news reports.

Hybrid funds, by design, invest across multiple asset classes to balance potential returns with lower overall portfolio risk. The inclusion of gold and silver in some multi-asset funds has also helped boost returns, especially in the wake of recent gains in commodity prices.

Read More: Best Defence Sector Mutual Funds In June 2025.

Conclusion

Hybrid mutual funds witnessed strong inflows in May, reflecting renewed investor interest in diversified investment strategies. While recent trends suggest growing preference for balanced portfolios amid market uncertainty, future flows will depend on broader economic conditions, interest rate movements, and global developments. Investors are advised to assess their risk appetite and investment horizon before making allocation decisions.

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.