Record equity inflows in July push mutual funds’ AUM beyond Rs 75 trn

Net inflows into equity mutual fund (MF) schemes scaled a record high in July as the market correction and a raft of new fund offerings (NFOs) lifted lump-sum collections. Active equity schemes raked in a net Rs 42,702 crore in July, going past the previous high of Rs 41,156 crore in December 2024.

Illustration: Dominic Xavier/Rediff

Systematic investment plan (SIP) inflows continued to scale new highs, rising over 4 per cent month-on-month (M-o-M) to Rs 28,464 crore.

“Equity MFs recorded their highest-ever monthly inflow of Rs 42,702 crore. SIP contributions hit a new record of Rs 28,464 crore, and contributing accounts grew 5.4 per cent to 91.1 million — clear evidence of disciplined investing even amid volatility,” said Venkat N Chalasani, chief executive of the Association of Mutual Funds in India (Amfi).

After the December high, equity funds had witnessed a decline for five consecutive months amid rising market uncertainty.

Net inflows, which picked up for the first time in June, were just Rs 23,587 crore that month.

The strong inflows across scheme segments took total industry assets past Rs 75 trillion for the first time.

Assets under management (AUM) rose 1.3 per cent M-o-M to Rs 75.4 trillion, according to data released by Amfi.

“With AUM going past Rs 75 trillion, we are on the right track towards achieving the Rs 100 trillion goal as an industry.

“In a heightened period of uncertainty, this is a testament to the resilience and maturity of our markets and investors alike,” said A Balasubramanian, managing director (MD) and chief executive officer, Aditya Birla Sun Life Asset Management Company.

Investors poured in a net Rs 1 trillion into debt funds and nearly Rs 21,000 crore into hybrid schemes. Passive funds garnered Rs 8,259 crore.

NFO collections, which surged over fifteenfold M-o-M in July to Rs 30,416 crore, supported inflows across categories.

Debt schemes alone garnered Rs 19,000 crore through NFOs.

Equity schemes recorded NFO collections of nearly Rs 9,000 crore, with most of the money coming into seven sectoral and thematic funds.

Inflows into existing schemes also grew during the month.

Experts attributed the surge in inflows, particularly in the sectoral and smallcap categories, to investors seeking higher returns.

“With equity inflows accelerating, especially into mid, small, and sectoral/thematic funds, investors are clearly seeking higher-return, growth-aligned segments despite volatility risks.

“The spike in equity inflows could also be driven by tactical responses to macro triggers, such as dips due to trade tensions or a subdued earnings outlook.

“Sustaining this level of interest may depend on whether markets continue to display similar favourable sentiment,” said Ankur Punj, MD and national head, Equirus Wealth.

The domestic equity markets faced turbulence in July, breaking a four-month winning streak.

Both the Nifty and Sensex ended July down about 3 per cent.

The broader Nifty Smallcap 100 and Nifty Midcap 100 indices dropped 6.7 per cent and 4 per cent, respectively.

During the preceding four months, the two indices had jumped over 20 per cent each.