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The net inflow into equity mutual funds surged 24 per cent to Rs 23,587 crore in June, reversing the declining trend of the last five months, driven by strong equity market performance across segments, data released by the Association of Mutual Funds in India (AMFI) showed on Wednesday.
Illustration: Dominic Xavier/Rediff
Also, the latest fund infusion by investors marks the 52nd consecutive month of net inflows into the segment.
Additionally, a healthy growth was witnessed in SIP (Systematic Investment Plan) inflow at Rs 27,269 crore during the month under review, an increase from Rs 26,688 crore in May.
“There is confidence amongst retail investors which is reflected through the incremental flows, this is very healthy and positive for the industry and Indian markets,” Akhil Chaturvedi, executive director & chief business officer of Motilal Oswal AMC, said.
According to the data, equity-oriented mutual funds saw an inflow of Rs 23,587 crore in June, way higher than the Rs 19,013 crore inflow seen in May.
This was the first increase in net equity fund inflows after five straight months of decline.
The net inflows continuously declined from Rs 41,156 crore in December to Rs 39,688 crore in January, Rs 29,303 crore in February, Rs 25,082 crore in March, and Rs 24,269 crore in April. Prior to this downward trend, inflows stood at Rs 35,943 crore in November.
“This rebound underscores a resurgence in investor confidence, supported by a strong equity market performance across segments.
“Broad-based market gains, including a surge in the Nifty 50 index and even stronger rallies in the mid- and small-cap indices, helped reignite interest in equity investments,” Himanshu Srivastava, associate director – manager research at Morningstar Investment Research India, said.
While most equity segments posted healthy inflows in June, equity-linked savings schemes (ELSS) were the only category to record a net outflow of Rs 556 crore.
Within equity fund categories, Flexi Cap Funds recorded the highest inflows in June, attracting Rs 5,733 crore. In addition, Small Cap Funds (Rs 4,024 crore) and Mid Cap Funds (Rs 3,754 crore) registered robust inflows.
Besides, Large Cap Funds saw net inflows of Rs 1,694 crore.
Overall, the mutual fund industry experienced an infusion of over Rs 49,000 crore in June, higher than Rs 29,000 crore in May.
The inflow has lifted the industry’s assets under management to a record Rs 74.4 lakh crore as of June from Rs 72.2 lakh crore at the end of May.
“This growth (in AUM) continues to be powered by strong retail participation and the steady rise in SIP inflows,” Venkat Chalsani, chief executive at Amfi, said.
Apart from equities, hybrid funds sustained momentum with Rs 23,223 crore in inflows in June, higher than Rs 20,765 crore in the preceding month, supported by arbitrage and multi-asset allocation strategies.
This reflects rising preference for products balancing return potential with volatility protection, Ankur Punj, MD and National Head at Equirus Wealth, said.
Gold ETFs witnessed a sharp uptick in investor interest in June, posting net inflows of Rs 2,081 crore, making it the highest monthly inflow since January.
This was in comparison to an inflow of Rs 292 crore in May.
“The robust inflows in June indicate a decisive shift in sentiment, likely supported by resilient gold prices, geopolitical uncertainties, and volatility in equity and fixed income markets, which have revived gold’s appeal as a safe-haven asset,” Nehal Meshram, senior analyst – manager research at Morningstar Investment Research India, said.
On the other hand, debt funds registered a net outflow of Rs 1,711 crore in the month under review compared to a Rs 15,908 crore outflow in May.
Before that, the funds registered a staggering inflow of Rs 2.2 lakh crore in April.
This stabilisation was supported by recovery in several low and medium duration categories, even as institutional-heavy segments like Overnight and Liquid Funds continued to witness redemption pressures.
These two categories together saw about Rs 33,350 crore in outflows during the month, likely driven by quarter-end liquidity needs and treasury adjustments, Meshram said.
