On the other hand, equity MF schemes witnessed sluggish demand and redemptions touched an eight-month high of Rs 2,910 crore in line with poor performance of benchmark indices.
Data released by the Association of Mutual Funds of India (Amfi) showed that MF industry's month-end AUM rose Rs 42,900 crore, or 5 per cent, month-on-month in May.
While the AUM of income funds, which include long-term debt funds, short-term debt funds, fixed maturity plans, rose 6 per cent to Rs 4.47 lakh crore, the assets of liquid funds also rose by Rs 21,700 crore to a 25-month high of Rs 2.06 lakh crore.
However, some experts expressed concern over this saying that AMCs have not benefitted much from this as most of the flows are into fixed income, where margins are very thin.
Industry expert Dhirendra Kumar, CEO, at Value Research, also shared a similar view, "From the broader economy point of view, it is not a good sign that such huge inflows of money is coming into debt funds, as this clearly shows that corporates instead of investing in capital expenditure, are putting their money in mutual funds."