Mutual Funds: Rs 2.36 Lakh Crore Inflow in July, Debt Schemes Lead
By Business Desk
Indian mutual funds attracted Rs 2.36 lakh crore in July, with debt schemes driving a significant rebound and reversing previous outflows. Equity and hybrid funds also saw inflows.
The Indian mutual fund industry experienced a significant reversal in July, attracting net inflows totaling Rs 2.36 lakh crore. This marks a stark turnaround from June, which saw outflows of Rs 52,937 crore.
Debt Funds Drive Industry Turnaround
The primary catalyst for this recovery was debt mutual funds, which recorded a substantial inflow of Rs 1.88 lakh crore during July. This figure sharply reverses the Rs 1.09 lakh crore net outflow witnessed in the preceding month.
Equity and Hybrid Fund Performance
Equity mutual funds continued to draw investor capital, securing inflows of Rs 24,697 crore in July. However, this represented a 14.8% decrease compared to June’s figures, indicating a moderation in the pace of equity investments.
- Hybrid mutual funds observed inflows of Rs 11,491 crore in July, a 10.9% reduction from June.
- Other schemes registered net inflows of Rs 12,517 crore, reflecting a 25% decline.
- Solution-oriented schemes saw an 18% increase in inflows, reaching Rs 379 crore.
- Closed-ended and interval schemes recorded outflows of Rs 681 crore, a notable improvement from June’s Rs 2,794 crore outflow.
Shifting Equity Preferences
Investor preferences within the equity segment shifted towards diversified categories during July. Santosh Joseph, CEO of Germinate Investor Services, noted an increasing favour for flexi-cap, mid-cap, and small-cap funds.
This preference aligns with market performance, as mid and small-cap segments have consistently outperformed the broader market since March. Consequently, large-cap funds experienced net outflows in July, reversing their positive trend from June.
Gold ETFs See Inflow Moderation
Gold Exchange Traded Funds (ETFs) continued to attract investors but at a significantly slower pace. Inflows into Gold ETFs dropped by nearly 55% in July to Rs 1,559 crore, compared to Rs 3,443 crore recorded in June.
The July data underscores a clear recalibration of investor strategies, with debt funds leading overall industry growth and a pronounced shift towards specific equity segments reflecting recent market dynamics.