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MF monthly flows lower on profit booking

ICICIdirect Research 13 Jun 2025 DISCLAIMER

Inflows in the month of May declined sharply to Rs 19000 crore as compared Rs 24000 crore in April. Ex-NFOs, inflows was Rs 16300 crore Vs Rs 24100 crore in April. Including NFOs, inflows were at Rs 24300 crore Vs Rs 25100.

Redemption were higher by 5000 crore while gross inflows were lower by Rs 2700 crore. As markets recovered during April and were largely higher during May, few investors booked profit. Some fatigue may have also built among retail investors as markets are in range with higher volatility in last 1 year.

Inflows were lower across category led by Thematic Funds (ex-NFO), Flexicap Funds, Largecap funds and Value/Contra funds. Flows were resilient in midcap (2800 vs 3300 cr) and smallcap (3200 vs 4000) category. SIP flows are holding flows in midcap and smallcap funds.

ETFs saw significantly lower inflows at Rs 4000 crore Vs Rs 19000 in April.

Heartening thing to note is that SIP inflows are rising and came at all-time high at Rs 26688 crore Vs 26632 crore.

Trend: Generally a rebound (April 2025) after continuous downtrend(Oct 2024 to March 2025) witness higher gross outflows as weak investors tend to exit during market recovery believing due to loss aversion bias (losses recovered and don’t want to incur loss again). However, once market stabilizes confidence returns so as those investors. We have seen similar trend post covid, Nov/Dec 2022, April to June 2023 etc. where flows get reduced during a bounce.   

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