BFSI Funds Top May Returns as Investors Continue to Favour Large-Cap Mutual Funds





Mumbai: Banking, Financial Services and Insurance (BFSI) thematic mutual funds emerged as the best-performing investment category in May, delivering a 5.5 per cent return while attracting Rs 1,013 crore in net inflows, according to a report by Vallum Capital released on Saturday.

The report highlighted an interesting trend in investor behaviour. Although micro-cap funds posted the highest returns among market-cap categories at 5.7 per cent, they received relatively weak investor inflows. Small-cap funds delivered 3.4 per cent returns and attracted Rs 2,229 crore.

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In contrast, large-cap funds generated the weakest monthly return of just 1.5 per cent, yet drew the highest inflows of Rs 8,565 crore—almost four times the amount invested in small-cap funds and more than double the inflows into mid-cap funds.

Mid-cap funds returned 1.6 per cent, receiving Rs 3,898 crore in investments, while flexi-cap funds gained 2.1 per cent and attracted Rs 5,350 crore. Large and Mid-cap funds recorded a 1.9 per cent return with inflows of Rs 2,617 crore.

According to the report, systematic investment plans (SIPs) and automatic investment mandates linked to large-cap and flexi-cap index funds continue to channel retail money into the country's largest and most liquid companies, regardless of which fund category delivers the best monthly performance.

As a result, large-cap funds—the biggest segment of India's mutual fund industry with assets exceeding Rs 10.5 lakh crore—continue to attract substantial investments even during periods when smaller fund categories outperform.

The report also noted that monthly SIP contributions reached a record Rs 30,954 crore in May, marking a 16 per cent increase compared to the same month last year. The number of active SIP accounts rose to 9.64 crore.

India's mutual fund industry managed assets worth Rs 81.58 lakh crore at the end of May, while equity mutual funds registered their 63rd consecutive month of positive net inflows, underlining sustained investor confidence.

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On the institutional side, foreign institutional investors (FIIs) were net sellers of equities worth Rs 32,963 crore, while domestic institutional investors (DIIs) offset the selling by purchasing equities worth Rs 82,165 crore.

Among sector-specific schemes, PSU Bank funds delivered the highest return of 6.9 per cent, attracting Rs 436 crore in inflows. Private Bank funds gained 6.5 per cent with Rs 329 crore in investments. Together, the two banking fund categories received Rs 765 crore during the month.

Meanwhile, Transportation and Logistics funds rose 4.4 per cent and attracted Rs 194 crore, while Auto funds posted a healthy 4.2 per cent gain during May.

 

With inputs from IANS

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