Sectoral and Thematic Fund Inflows Drop 67% to ₹647.87 Crore in May 2026

In May 2026, sectoral and thematic fund inflows dropped by 67%, reaching ₹647.87 crore. The latest data shows a shift in investor preferences as broader equity fund inflows also weakened during this period. 

Decline in Sectoral and Thematic Fund Inflows 

The decline in sectoral and thematic fund inflows to ₹647.87 crore marks a 67% reduction from the previous month April 2026 fund inflow of ₹1,949.36 crore.  

This drop suggests investors are favouring diversified fund strategies over concentrated sectoral bets, given the current market uncertainties. 

Overall Equity Fund Inflows 

Overall equity fund inflows saw a 40% decrease in May 2026. Despite this, large-cap, mid-cap, and small-cap funds attracted more inflows compared to sectoral and thematic funds, reflecting the shift towards broader investment categories. 

Sector Performance Variability 

The wide variation in sector performance has highlighted the challenges of sectoral investing. For example, while the BSE Power index increased by 25-30%, the Nifty IT index fell by over 25%, demonstrating the risks associated with timing and selection in thematic investments. 

Read More: AMFI Data: Equity Mutual Fund Inflows Drop to Lowest in 12 Months to ₹22,907.77 Crore in May 2026! 

Inflows and Redemption Activity 

In May 2026, gross inflows in sectoral and thematic funds totalled ₹8,629.10 crore, with redemptions at ₹7,981.23 crore.  

The absence of large-scale profit booking pointed towards softer investor conviction rather than a strong move to liquidate holdings. 

Market Landscape and Future Considerations 

Despite the challenges, some sectors remain appealing due to structural growth trends. The assets under management for sectoral and thematic funds marginally increased from ₹5,30,230.25 crore in April 2026 to ₹5,35,187.18 crore in May 2026. 

Conclusion 

In May 2026, sectoral and thematic fund inflows declined by 67% to ₹647.87 crore, reflecting a broader trend of investors shifting towards diversified fund strategies. Overall equity fund inflows also fell by 40%, while large-cap, mid-cap, and small-cap funds continued to attract relatively better inflows. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or 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 are subject to market risks, read all scheme-related documents carefully.