Banking, financial services and insurance (BFSI) thematic funds led the investment universe in May, returning 5.5 per cent and attracted Rs. 1,013 crore in inflows due to prevalence of large cap stocks, a report said on Saturday.
The report from Vallum Capital noted an anomaly where micro‑cap funds became May’s best performers, returning 5.7 per cent, but saw weak inflows and small‑caps returned 3.4 per cent and attracted Rs 2,229 crore.
Large‑cap funds, by contrast, returned just 1.5 per cent — the weakest cap‑wise monthly return — yet pulled in Rs 8,565 crore in inflows, nearly four times what small‑caps received and more than double mid‑caps.
The mid‑caps gained 1.6 per cent with Rs 3,898 crore of inflows. Flexi-cap funds, which delivered 2.1 per cent, drew Rs 5,350 crore, while Large and Mid-cap funds collected Rs 2,617 crore at 1.9 per cent.
The report noted that standing instructions on large‑cap and flexi‑cap index trackers mechanically route retail savings to the largest, most liquid end of the market, regardless of where monthly performance was generated.
Consequently, India’s biggest fund category by AUM large-cap, at over Rs 10.5 lakh crore continues to accumulate capital even in months where smaller, higher-performing categories are left undersubscribed.
SIP contributions hit Rs 30,954 crore for the month, 16 per cent higher than a year ago, with 9.64 crore active accounts.
India’s mutual fund industry held firm at Rs 81.58 lakh crore in assets as of May-end, and equity funds recorded their 63rd consecutive month of net positive inflows.
Foreign institutional investors (FIIs) sold Rs 32,963 crore whereas domestic institutional investors bought Rs 82,165 crore worth of equities.
The report said that PSU Bank funds gained 6.9 per cent and collected Rs 436 crore, while Private Bank funds rose 6.5 per cent and drew Rs. 329 crore, together pulling in Rs 765 crore.
Transportation and logistics funds gained 4.4 per cent and drew Rs 194 crore, while auto funds gained 4.2 per cent.
