Equity Mutual Fund Inflows Drop 21.66% in May; Small Caps Gain, AUM Hits ₹72.2 Lakh Crore

By-Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, on the performance of the mutual fund industry in May 2025.

 “Inflows into equity mutual funds declined by 21.66 per cent on a month-on-month basis at Rs 19,013. 12 crore in May 2025, as compared with Rs 24,269.26 crore in April this year. On a year-on-year basis, inflows dropped by nearly 45.2 per cent from Rs 34,697 crore last year as persistent concerns over India-U.S. trade relations following the conclusion of the 90-day pause continued to act as an external headwind. With inflows to the tune of Rs 3214.21 crore, small cap funds continued to garner investor interest witnessing a growth of 17.97 per cent from Rs 2724.67 crore in May 2024. The Reserve Bank of India’s latest move to slash repo rate by 50 basis points is expected to have a positive impact on the market and this is likely to draw retail investor’s interest in mutual funds. The industry AUM has touched Rs 72.20 lakh crore in May 2025 and we expect the industry to breach the Rs 100 lakh crore mark in the next few years.