Perspective on AMFI Data by Mr. Sanjay Agarwal, Senior Director at CareEdge Ratings
Below the Perspective on AMFI Data by Mr. Sanjay Agarwal, Senior Director at CareEdge Ratings
“Equity mutual fund inflows moderated 15% month-on-month (m-o-m) to Rs 24,697 crore in July 2026 from Rs 28,973 crore in June, pointing to some cooling in incremental equity allocation after the June rebound. Even so, sustained inflows of this order underline the resilience of investor sentiment amid global uncertainties and intermittent market volatility. Expectations of supportive domestic macroeconomic conditions and continued strong participation from retail investors remained the key drivers of investment activity during the month.
Within equity, Flexi Cap Funds crossed the Rs 6 lakh crore AuM mark to become the largest actively managed equity category. Small-cap funds were the strongest category on flows, attracting Rs 7,768 crore, up 39% m-o-m, while mid-cap and multi-cap funds saw steady inflows, rising marginally by 2% and 5% m-o-m respectively. In contrast, large-cap funds witnessed outflows of Rs 1,322 crore against an inflow of Rs 2,067 crore in June. The divergence indicates a continued preference for small and mid-caps, with investors turning more selective on large-cap and diversified equity allocations. Debt-oriented mutual funds saw an expected sharp reversal in July, recording net inflows of Rs 1.88 lakh crore against an outflow of Rs 1.09 lakh crore in June. This follows the seasonal pattern of June quarter-end outflows being reversed in July and is therefore more reflective of a normalisation of quarter-end treasury movements than a structural shift toward debt funds. The flows were concentrated in liquid, overnight and money market funds — liquid funds alone attracted Rs 1.19 lakh crore, while overnight and money market funds received Rs 40,413 crore and Rs 21,180 crore respectively, and ultra-short duration funds added Rs 8,039 crore. Corporate bond, banking & PSU and longer duration-oriented funds continued to see modest outflows, indicating a preference for short-term and liquidity products and investor caution on taking long-term bets. Gold ETFs continued to attract incremental inflows in July, albeit at a reduced pace, receiving net inflows of Rs 1,559 crore, nearly 55% lower than the Rs 3,443 crore seen in June. Gold ETFs had returned to positive territory in June after net outflows of Rs 725 crore in May. Hybrid funds also stayed in positive territory, with net inflows declining 11% to Rs 11,491 crore from Rs 12,893 crore in June. The mutual fund industry's assets under management rose 4.3% sequentially to Rs 85.76 lakh crore in July 2026 from Rs 82.22 lakh crore in June, marking a strong recovery after the marginal increase seen in the previous month. Collections under new issuances remained muted, with only Rs 2,022 crore mobilised across 25 new fund offerings during the month, of which three open-ended equity schemes accounted for around 38%.”
Above views are of the author and not of the website kindly read disclaimer
