MUMBAI: Inflows into equity mutual funds rose by Rs 29,329 crore in August, hitting a four-month high, driven by strong interest in mid- and small-cap funds, even though the overall inflows declined due to significant outflows from debt-oriented schemes, yet the overall assets under management rose to Rs 87.07 trillion.
Equity mutual funds attracted Rs 29,329 crore in August, marking the highest net inflow in four months, driven by strong investors interest in mid-cap and small-cap funds, Association of Mutual funds in India (Amfi) said on Thurday releasing the monthly numbers. The inflows were nearly 19% higher than Rs 24,697 crore seem n July.
The overall mutual fund industry saw a decline in net inflows to Rs 41,353 crore compared to a staggering Rs 2.36 trillion in July, primarily driven by huge outlfows from debt-oriented schemes to the tune of Rs 8,127 crore compared to an inflow of Rs 1.88 trillion in the previous month, Amfi said.
Despite this, the industry's assets under management rose to Rs 87.07 trillion in the reporting month from Rs 85.75 trillion in July.
Equity schemes saw a net inflow of Rs 29,328.62 crore in August, the highest inflow since April, when such schemes got Rs 38,440 crore. The net inflows stood at Rs 28,973 crore in June and Rs 22,908 crore in May.
Among equity categories, smallcap funds got the highest net inflows of Rs 7,973 crore, followed by midcap funds at Rs 6,989 crore.
However, large-cap funds saw net outflows of Rs 1,147 crore in August, the data showed.
Gold ETFs also continued to attract money recording net inflows of Rs 2,597 crore, sharply higher than the Rs 1,559 crore inflows in July, while silver ETFs saw Rs 1,270.63 crore flowing.
The rise in precious-metal ETF flows came alongside continued demand for equity, suggesting that investors were adding diversification rather than moving entirely away from risk assets.
Meanwhile, Amfi said, large-cap funds saw a second straight month of outflows, with multi-asset allocation funds continuing to attract substantial investor interest, recording Rs 3,671 crore in net inflows.
The overall jump was was led by strong demand for small-cap and mid-cap funds, while large-cap schemes saw the second consecutive month of net outflows.
Small-cap funds led the key market-cap categories with Rs 7,973.33 crore of inflows compared to Rs 7,767.50 crore in July, while mid-cap funds saw Rs 6,989.40 crore inflows rising from Rs 6,192.31 crore a month earlier. Large and mid-cap funds got Rs 3,873 crore, while flexi-cap funds received Rs 5,059.42 crore.
The stronger flows into these categories came alongside continued SIP participation. Gaurav Goyal, chief business officer at Canara Robeco AMC, said the Rs 32,297 crore SIP contribution, together with strong equity inflows, show that investors are increasingly staying invested through market cycles.
“The opportunity now lies in converting this growing participation into deeper and longer-term investor relationships,” Goyal said.
Saugata Chatterjee of Nippon India Mutual Fund, said sustained interest in gold ETFs, along with consistent flows into multi-asset allocation funds, reflect a growing preference for diversification and balanced portfolio allocation amid global uncertainty.
