Flexi Cap Fund Inflows Halve to Rs 5,175 Crore in May

Net inflows into flexi cap mutual funds saw a significant decline of 49% in May, falling to Rs 5,175 crore. This trend aligns with a broader moderation across the entire equity mutual fund industry. Industry experts attribute this slowdown to prevailing geopolitical concerns and the anticipation of profit-taking following a recent market rally. They recommend that investors maintain their long-term investment plans despite these short-term fluctuations.

In parallel, mutual funds collectively reduced their cash holdings by over Rs 10,000 crore during May. This reduction brings the total cash allocation to Rs 1.87 lakh crore, which now constitutes 4.24% of their overall assets under management. Despite the reduction in cash, equity assets under management experienced a monthly increase of Rs 46,274 crore.

Meanwhile, institutional investors are exercising greater scrutiny over private market investments. This heightened caution follows recent turbulence experienced by prominent firms such as Partners Group and Blackstone. While investors are not divesting from private markets, they are now closely examining liquidity terms and the performance metrics of these investments, according to Swiss pension fund consultants.

The shift in investor sentiment suggests a move towards more selective engagement in private markets, prioritizing transparency and robust performance data in light of recent industry challenges.