Equity Fund Inflows Fall 15%
Equity mutual funds continued to attract money in July, but inflows were lower than in June.
Equity-oriented schemes received ₹24,697 crore in July. This was 14.8% lower than the ₹28,973 crore received in June.
The decline came despite continued interest in several major equity categories. Mid-cap and small-cap funds remained among the biggest destinations for fresh investments. Flexi-cap funds also continued to receive sizeable inflows, although their collections declined during the month.
Large-cap funds saw the sharpest change among the major categories. The category moved from a ₹2,067 crore inflow in June to a ₹1,322 crore outflow in July.
Value and contra funds also moved into negative territory. The category reported a ₹145 crore outflow compared with an inflow of ₹687 crore in June.
Sectoral and thematic funds remained in positive territory, but inflows fell to ₹1,328 crore from ₹1,469 crore.
The July numbers therefore suggest that the slowdown in equity inflows was not spread equally across all categories.
Small-Cap Funds Lead Equity Inflows
Small-cap funds were the standout category within equity schemes in July.
The category attracted ₹7,768 crore during the month. This was higher than the ₹5,602 crore received in June. On a month-on-month basis, inflows increased by around 38.7%.
Small-cap funds also recorded the highest inflow among the major equity categories in July.
Mid-cap funds followed closely. They attracted ₹6,192 crore, slightly higher than the ₹6,090 crore received in June.
Together, small-cap and mid-cap funds attracted nearly ₹13,960 crore in July. This accounted for more than half of the total inflows into equity-oriented schemes during the month.
The trend was different for flexi-cap funds. The category received ₹4,709 crore in July compared with ₹5,231 crore in June. Despite the decline, flexi-cap funds remained one of the largest destinations for equity investments.
Multi-cap funds were another category that managed to grow its inflows. Collections increased to ₹3,227 crore from ₹3,070 crore in June.
Large and mid-cap funds, however, saw inflows decline to ₹3,425 crore from ₹4,321 crore.
The data shows that investors did not move away from equity funds altogether in July. Instead, the flow was more concentrated in certain categories, particularly small-cap and mid-cap schemes.
Large-Cap Funds Move Into Outflow
Large-cap funds saw a notable change in July. The category recorded a net outflow of ₹1,322 crore after attracting ₹2,067 crore in June.
This was one of the biggest changes among the main equity categories.
The number is also worth watching because large-cap funds had remained in positive territory in June. Their inflows had increased by nearly 30% during that month.
The July reversal came even as equity funds as a whole remained in positive territory. It shows that the moderation in equity inflows was more visible in some categories than others.
ELSS funds also remained in the red. They recorded an outflow of ₹959 crore in July compared with ₹634 crore in June. Dividend-yield funds reported withdrawals of ₹169 crore.
Hybrid Fund Inflows Moderate
Hybrid funds also saw fresh investments in July, although the pace slowed from the previous month.
Hybrid schemes attracted ₹11,491 crore in July compared with ₹12,893 crore in June. This marked a decline of around 10.9% on a month-on-month basis.
Arbitrage funds remained the biggest contributor. They attracted ₹6,280 crore during July, compared with ₹7,110 crore in June.
Multi-asset allocation funds received ₹3,120 crore. The figure was lower than the ₹3,980 crore recorded in June.
Balanced hybrid and aggressive hybrid funds attracted ₹1,986 crore in July. This was slightly lower than the ₹2,121 crore received in June.
Equity savings funds also continued to see withdrawals. The category reported a ₹477 crore outflow in July.
Overall, hybrid funds remained a positive contributor to industry flows, but the pace of investments was slower than in June.
ETF Inflows Remain Strong
Investors also continued to put money into ETFs and index-linked products in July.
The broader "Other Schemes" category recorded a net inflow of ₹12,517 crore. This included index funds, gold ETFs, other ETFs and fund-of-funds investing overseas.
The figure was lower than the ₹16,724 crore inflow recorded in June. Even so, the category remained firmly in positive territory.
Other ETFs attracted ₹9,121 crore in July. This remained the biggest contributor within the category.
Index funds also saw an improvement. They received ₹1,537 crore in July after recording an outflow in June.
Gold ETFs attracted ₹1,337 crore during the month. However, this was lower than the ₹2,182 crore inflow recorded in June.
Fund-of-funds investing overseas moved into negative territory. The category recorded an outflow of ₹90 crore compared with an inflow of ₹102 crore in June.
The July data therefore shows continued interest in ETFs, although the overall inflow into the category was lower than the previous month.
Solution-Oriented Funds See Higher Inflows
Solution-oriented schemes also remained in positive territory.
The category attracted ₹379 crore in July, compared with ₹321 crore in June. This represents an increase of around 18%.
Children's funds accounted for most of the inflows. They attracted ₹319 crore during July, compared with ₹264 crore in June.
Retirement funds also recorded a small increase. Inflows rose to ₹60 crore from ₹57 crore.
The category is much smaller than equity, debt and hybrid funds. However, it has continued to record positive flows in recent months.
Mutual Fund Flows Turn Positive in July
The mutual fund industry's grand total turned positive in July, with net inflows of ₹2,35,902 crore compared with a net outflow of ₹52,949 crore in June. The sharp turnaround was largely driven by the strong reversal in debt fund flows during the month.
