The shares of asset management companies (AMC) saw profit booking on June 10 after the Association of Mutual Funds of India (AMFI) released data for the month of May. The net inflows in equity mutual funds dropped nearly 22 percent since last month to hit a one-year low of Rs 19,013.12 crore in May.
HDFC AMC shares tumbled over 2 percent to trade at Rs 5,112 apiece in the afternoon, while UTI AMC shares fell over 1.3 percent to trade at Rs 1,257 apiece. Aditya Birla Sun Life AMC shares meanwhile fell nearly 1 percent to hover around Rs 801 apiece.
ABSL AMC and UTI AMC shares rose up to 20% in the past one month while HDFC AMC shares rose 15%.
While inflows into equity mutual funds declined, the monthly inflows into mutual funds through the Systematic Investment Plan (SIP) route rose by 0.21 percent to a fresh high of Rs 26,688 crore in May.
The overall net assets under management (AUM) of the mutual fund industry rose to Rs 72.20 lakh crore for the first time, as against Rs 69.99 lakh crore in April. Overall, the mutual fund industry saw net inflows of Rs 29,108.33 crore in May.
"The broader slowdown in equity inflows can be attributed to a mix of factors: a less buoyant equity market in May compared to April, concerns around global economic headwinds, and a possible consolidation phase or profit booking in the domestic equities following sharp rallies in the previous months and stretched valuations. Also, heightened global volatility—stemming from geopolitical tensions with India launching Operation Sindoor against Pakistan and concerns around global inflation, contributed to a risk-off sentiment among some investors," said Himanshu Srivastava, Associate Director- Manager Research, Morningstar Investment Research India.
"While the equity markets continued their upward momentum in May, gains were relatively subdued, potentially prompting investors to adopt a wait-and-watch approach," Srivastava added.
Gold exchange-traded funds (ETFs) recorded a net inflow of Rs 291.91 crore in May, marking an improvement from the marginal outflow of Rs 5.82 crore in April. "The renewed traction in May signals a gradual return of investor interest, likely driven by resilient gold prices and sustained global uncertainties that reinforce gold’s appeal as a strategic hedge. The uptick also shows that investors are regaining confidence in gold, as it continues to offer stability amid mixed signals from equity and bond markets," said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India.
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