Mumbai
Banking, financial services and insurance (BFSI) thematic funds emerged as the top-performing category in May, delivering returns of 5.5 per cent and attracting inflows worth Rs 1,013 crore, according to a report by Vallum Capital.
The report highlighted an unusual trend in market performance versus investor behaviour. Micro-cap funds delivered the highest monthly returns at 5.7 per cent but saw relatively weak investor participation. Small-cap funds returned 3.4 per cent and attracted inflows of Rs 2,229 crore.
In contrast, large-cap funds posted the weakest performance among equity categories at 1.5 per cent but received the highest inflows of Rs 8,565 crore, nearly four times the inflows into small-cap schemes. Mid-cap funds gained 1.6 per cent and attracted Rs 3,898 crore, while flexi-cap funds delivered 2.1 per cent returns with inflows of Rs 5,350 crore. Large and mid-cap funds collected Rs 2,617 crore.
The report noted that systematic investment plans (SIPs) and index-tracking flows tend to channel retail investments toward large and highly liquid stocks, regardless of short-term performance trends. As a result, large-cap funds, which manage assets exceeding Rs 10.5 lakh crore, continue to accumulate steady inflows even during periods when smaller-cap segments outperform.
SIP contributions reached Rs 30,954 crore in May, marking a 16 per cent year-on-year increase, with 9.64 crore active accounts. The mutual fund industry’s total assets stood at Rs 81.58 lakh crore, while equity funds recorded their 63rd consecutive month of net positive inflows.
Institutional activity showed divergence, with foreign institutional investors selling Rs 32,963 crore worth of equities, while domestic institutional investors purchased Rs 82,165 crore during the same period.
Among sectoral themes, PSU Bank funds gained 6.9 per cent and attracted Rs 436 crore, while private bank funds rose 6.5 per cent with inflows of Rs 329 crore. Transportation and logistics funds gained 4.4 per cent, and auto funds advanced 4.2 per cent during the month.