Equity Mutual Fund Inflows Rise 3% in August; Debt Fund Inflows Plummet 62%

Equity Mutual Fund Inflows Rise 3% in August; Debt Fund Inflows Plummet 62%

Equity mutual fund inflows increased by 3% to ₹38,239 crore in August, up from ₹37,113 crore in July, according to data from the Association of Mutual Funds in India (AMFI). In contrast, debt fund inflows experienced a dramatic 62% decline, falling to ₹45,169 crore from ₹1.19 lakh crore the previous month.

Large-cap funds saw a notable surge, with inflows growing by 293% to ₹2,636 crore, up from ₹670 crore in July. This rise is attributed to a growing preference for large-cap investments. Manish Mehta, Head of Sales, Digital & Marketing at Kotak Mahindra Asset Management, commented, “From a valuation standpoint, large-cap funds are where new money should be allocated, whether through large-cap, flexi-cap, or multi-cap funds with a large-cap bias. This trend is evident in the increased inflows.”

Mid-cap funds attracted ₹3,054 crore in August, a significant rise from ₹1,644 crore in July. Small-cap funds, however, saw a slight decrease in inflows to ₹3,209 crore from ₹4,171 crore the previous month.

Multi-cap funds garnered ₹2,475 crore in August, up from ₹1,703 crore in July, while flexi-cap funds led the equity categories with inflows of ₹3,513 crore, up from ₹2,081 crore in July. Value/contra funds collected ₹1,728 crore, and dividend yield funds brought in ₹499 crore. Conversely, focused funds faced a net outflow of ₹83 crore, and Equity Linked Savings Schemes (ELSS) recorded outflows of ₹205 crore.

Equity assets under management (AUM) exceeded ₹30 lakh crore in August. Akhil Chaturvedi, Chief Business Officer at Motilal Oswal AMC, highlighted the balanced inflows across equity categories: “The inflows are well-distributed among multi-cap, large-cap, and small-cap funds, all ranging between ₹2,500 to ₹3,500 crore. This balance is a positive indicator for the market. Sectoral funds, driven by new fund offerings (NFOs), have also performed well, with ₹18,000 crore allocated.”

In total, inflows through new fund offerings amounted to ₹13,815 crore, with thematic NFOs contributing ₹10,202 crore of this figure.