New Delhi, Equity-oriented mutual funds garnered a net inflow of ₹42,702 crore in July, making it the highest-ever monthly tally for the segment, propelled by contributions from thematic and flexi cap funds, despite heightened market volatility plagued by tariff war with the US.
This was a sharp 81 per cent surge from ₹23,587 crore inflow registered in June, suggesting a clear resurgence in domestic risk appetite. Also, the latest fund infusion by investors marks the 53rd consecutive month of net inflows into the segment.
Additionally, a healthy growth was witnessed in SIP inflow at ₹28,464 crore during the month under review, an increase from ₹27,269 crore in June, data released by the Association of Mutual Funds in India showed on Monday.
“Despite uncertainties due to tariff war, India’s growth story remains intact which is evident in strong inflow in equities backed by benign inflation, improved liquidity, improved savings,” Venkat N Chalasani, CEO of Amfi, told PTI.
Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India, believes that intermittent market corrections during the month on the back of tariff war with the US, as well as ongoing geopolitical tension, which offered investors attractive entry points.
Among equity-oriented mutual fund categories, Sectoral or Thematic funds topped the charts with a net inflow of ₹9,426 crore, fuelled by the launch of seven new schemes that collectively garnered ₹7,404 crore. This was followed by Flexi-Cap funds which attracted ₹7,654 crore, supported by their versatile mandate to capture opportunities across market capitalisations, which continues to resonate with investors.
In addition, Small Cap Funds and Mid Cap Funds , Large & Mid Cap Fund registered robust inflows. Besides, Large Cap Funds saw net inflows of ₹2,125 crore. Barring equity-linked saving schemes , which saw net outflows of ₹368 crore, all other equity categories reported inflows.
“Strong corporate earnings, a steady macroeconomic backdrop, and expectations of a gradual monetary easing cycle kept investors engaged, particularly in growth-oriented categories such as flexi, mid, and small caps,” Srivastava said.
Overall, the mutual fund industry experienced an infusion of ₹1.8 lakh crore in July, higher than ₹49,000 crore in June and ₹29,000 crore in May. This was driven by robust participation across categories, especially in debt, followed by equity.
The strong inflow has lifted the industry’s assets under management to surpass ₹75 lakh crore for the first time. The asset base rose by 1.3 per cent to ₹75.36 lakh crore as of July from ₹74.4 lakh crore at the end of June despite pressures from strong US Dollar and persistent foreign fund outflows, Amfi’s Chalasani said.
Debt funds have staged a strong comeback, with ₹1.06 lakh crore inflows, led by low-duration and money market funds, alongside steady inflows in liquid and overnight funds. This came following a net outflow of ₹1,711 crore in June.
In addition, Gold ETFs witnessed a net inflow of ₹1,256 crore in July, moderating from the robust ₹2,081 crore seen in the preceding month but still marking the third consecutive month of positive flows.
“The sustained demand reflects gold’s continued appeal as a portfolio diversifier amid lingering macro uncertainties, including volatile global interest rate expectations and geopolitical risks,” Nehal Meshram, Senior Analyst – Manager Research at Morningstar Investment Research India, said.
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