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Below the Perspective on AMFI Data by Archit Doshi, Senior Vice President at PL (Prabhudas Lilladher) AMC

“The mutual fund industry witnessed a notable moderation in May 2026, with net equity inflows slumping to Rs 22,907.77 crore. This deceleration was broad-based across the board, significantly impacting flexi-cap, small-cap, and mid-cap allocations. Concurrently, the monthly SIP contribution dipped to Rs 30,954 crore. While seemingly a marginal 0.5% month-on-month decline, this consecutive drop, following a 3% dip in April, is beginning to signal a valid cause for concern. With flat to negative returns observed in several SIP vintages over the past 1-2 years, retail investors are increasingly viewing sustained allocations as a challenge, which is testing their long-term conviction.

From a broader portfolio perspective, a strategic realignment is clearly underway. Debt funds experienced sharp net outflows of Rs 96,948.51 crore, reversing the institutional treasury surge seen at the start of the financial year. Even alternative allocations faced pressure, with Gold ETFs swinging to a net outflow of Rs 725.04 crore. However, Hybrid schemes continued to attract capital, securing net inflows of Rs10,560.24 crore. This suggests that while outright equity aggression is cooling, investors are actively seeking balanced, risk-adjusted exposures amidst the prevailing market headwinds. New fund activity also remained subdued, with 13 launches mobilizing just Rs 471 crore during the month.”

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