Indian Mutual Funds See ₹2.36 Lakh Crore Inflow in July

Indian mutual fund schemes recorded a substantial net inflow of ₹2.36 lakh crore in July, marking a significant reversal from the previous month’s outflow. This positive shift propelled the industry’s Assets Under Management (AUM) up by 4.3% month-on-month, reaching ₹85.76 lakh crore.

• Net Inflow (July): ₹2.36 lakh crore
• Previous Month Outflow (June): ₹52,949 crore
• Total AUM (end of July): ₹85.76 lakh crore
• AUM Month-on-Month Increase: 4.3%

The primary catalyst for this sharp turnaround was debt-oriented schemes, which attracted a net inflow of ₹1.88 lakh crore during July. This stands in stark contrast to the approximately ₹1.09 lakh crore outflow observed from these schemes in June, according to data from the Association of Mutual Funds in India (AMFI).

Debt Scheme Performance

• Debt-oriented schemes inflow: ₹1.88 lakh crore
• Liquid funds inflow: ₹1,19,066 crore
• Overnight funds inflow: ₹40,413 crore
• Money market funds inflow: ₹21,180 crore

These robust debt flows indicate a clear preference among investors, who are prioritizing liquidity and flexibility over taking on significant duration risk in the current market environment.

Equity Inflows Moderate

Equity-oriented schemes also maintained positive territory, drawing ₹24,697 crore in July. However, these inflows represent a 15% decline from ₹28,973 crore recorded in June and significantly less than the ₹42,702 crore from July of the previous year.

• Equity schemes inflow (July): ₹24,697 crore
• Decline from June: 15%
• Small-cap funds inflow: ₹7,768 crore
• Mid-cap funds inflow: ₹6,192 crore
• Flexi-cap funds inflow: ₹4,710 crore

• Large-cap funds outflow: ₹1,322 crore
• ELSS funds outflow: ₹959 crore

Despite this moderation, equity mutual funds have now achieved their 65th consecutive month of net inflows. The slower pace of equity investments suggests increased selectivity among investors, potentially driven by concerns over valuations and subdued equity returns.

SIP Contributions Strong

Systematic Investment Plan (SIP) contributions continued to offer strong support for broader equity participation. SIP inflows in July increased by 12.28% year-on-year, reaching ₹31,961 crore.

• SIP inflows (July): ₹31,961 crore
• SIP Year-on-Year increase: 12.28%
• SIP (June): ₹31,781 crore
• SIP (Previous Year July): ₹28,464 crore

SIP contributions have consistently remained above the ₹31,000 crore mark for five consecutive months, underscoring resilient retail participation. The overall AUM for the mutual fund industry expanded to ₹85.76 lakh crore by the end of July, up from ₹82.22 lakh crore at the close of June, with open-ended schemes contributing significantly to both assets and inflows.