Net inflows into equity mutual funds witnessed a sharp decline in May, falling nearly 40% month on month to ₹22,908 crore from ₹38,440 crore in April, according to the latest data released by the Association of Mutual Funds in India (AMFI). The figure marks the lowest monthly equity inflow recorded so far in 2026.
The slowdown was visible across major equity fund categories. Large-cap funds saw inflows decline by approximately 37%, while mid-cap funds recorded a drop of around 33%. Small-cap funds also witnessed reduced investor participation, with inflows falling by nearly 28%. Among the worst affected categories were flexi-cap funds, where inflows were almost halved compared to the previous month.
Despite the moderation in fresh investments, Systematic Investment Plan (SIP) contributions remained resilient, standing at ₹30,954 crore in May. This marked the third consecutive month that SIP inflows stayed above the ₹30,000 crore level, reflecting the continued commitment of retail investors towards disciplined long term investing.
Market experts believe the latest data points to caution rather than panic among investors. Ongoing market volatility, geopolitical uncertainties, elevated crude oil prices and concerns over economic growth may have prompted investors to slow down fresh lump sum allocations. However, the steady flow of SIP investments suggests that many retail participants remain confident in their long term investment strategies.
The AMFI figures indicate that while investor sentiment has become more selective in the short term, there is no evidence of a broad based exit from equity mutual funds. Instead, the data highlights a more measured approach, with investors balancing caution with continued participation through regular investment plans.
The coming months will be closely watched by market participants to assess whether the recent moderation in inflows is temporary or signals a shift in investor behaviour amid evolving economic and geopolitical conditions.
