The month of July proved to be a record month for equity flows, marking the 53rd straight month of positive flows, with a record Rs 42,702 crore going into growth and equity-oriented schemes with SIP activity also hitting fresh peaks.
The month also saw 30 open-ended scheme launches across categories, mobilising Rs 30,416 crore, out of which 10 were equity schemes that garnered nearly Rs 9,000 crore. This comes despite continued volatility in the equity markets as both Nifty 50 and Sensex fell three percent each.
Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research noted three defining themes for the month: resilient retail SIP momentum; a supportive macro and earnings backdrop that kept investors engaged in growth-oriented categories like flexi, mid, and small caps; and seasonal tax-related redemptions that drove higher ELSS outflows.
Here are some of the key takeaways from the monthly mutual fund flows in July:
Record Equity Inflows Defy Market Decline
India’s mutual fund industry saw unprecedented investor interest in equities during July, registering the highest-ever monthly net inflows into equity schemes at Rs 42,702 crore. This surge came even as equity benchmarks lost ground as the Nifty 50 fell 2.77% and the BSE Sensex fell 2.76%. Total equity AUM declined around 0.6 percent month-on-month to Rs 33.28 lakh crore, from Rs 33.47 lakh crore in June, despite the inflows.
Also Read: Strong surge in net equity inflow for July at a record high of over Rs 42,700 crore, shows AMFI data
Suranjana Borthakhur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India) noted that this month has been extremely encouraging inflow numbers. "Equity flows have surged by 81% month-on-month, with the largest boost coming from sectoral funds, particularly new fund offerings," she said.
Broad-Based Buying
Investor demand was spread across almost all equity categories. Small cap funds led in growth, attracting Rs 6,484 crore in inflows and lifting AUM 0.4% to Rs 3.56 lakh crore. Mid cap funds received Rs 5,182 crore but saw AUM dip 0.7% to Rs 4.29 lakh crore due to MTM losses.
Large & mid cap funds gained Rs 5,035 crore, with AUM down 0.4% to Rs 3 lakh crore. Flexi cap funds brought in Rs 7,654 crore, ending the month with Rs 4.93 lakh crore in assets (-0.2% MoM), while multi cap funds saw inflows of Rs 3,991 crore, increasing their AUM by 0.3 percent to Rs 2.05 lakh crore.
Sectoral/thematic funds topped inflows at Rs 9,426 crore but posted flat AUM at Rs 5.10 lakh crore. The only category to see outflows was ELSS, which saw outflows of Rs 368 crore.
Viraj Gandhi, CEO of SAMCO Mutual Fund noted that while the market is currently taking a cautious stance since the global uncertainty surrounding the tariff war, with a record-breaking collection the buoyancy in MF collections is clearly evident.
"The market share has clearly shifted towards thematic, multicap, midcap, and small cap schemes during the last 36 months. The clear market share winner in hybrid schemes is multi-asset," Gandhi added.
NFOs Add Nearly Rs 9,000 Crore to Equity
Ten new equity fund offers (NFOs) debuted in July, raising a combined Rs 8,997 crore. These launches spanned themes from diversified large cap to specialised sector funds, contributing more than one-fifth of the month’s total equity inflows. AMFI noted that strong retail interest in NFOs added to the breadth of July’s investment momentum.
SIPs hit all-time high in contributions and accounts
Systematic investment plan (SIP) activity reached fresh records, with monthly contributions at Rs 28,464 crore, up 4.3 percent over June’s Rs 27,276 crore and 22 percent higher than Rs 23,332 crore in July 2024.
The number of active SIP accounts rose by 47 lakh to 9.11 crore, while SIP AUM ended the month at Rs 15.19 lakh crore, making up 20.2% of total industry assets. This marks the seventh consecutive month of record SIP contributions.
Borthakur added, "SIP numbers are also seeing a growth, with the Rs 28,464 crore mark now becoming a regular occurrence and could reach the Rs 30,000 crore monthly milestone soon. This reflects growing investor maturity, rising financial awareness, greater digital access, and sustained market confidence. The resilience of the Indian markets, despite global uncertainties, is remarkable. Using corrections as opportunities is wise, but in the long run, systematic investing remains the most powerful approach," she said.
ETFs See Mixed Flows
Passive equity products extended their growth for a 57th straight month of net inflows, with ETFs and index funds together attracting Rs 8,259 crore in July. Gold ETFs saw Rs 1,256 crore in net inflows, lifting AUM to Rs 67,635 crore on positive MTM gains.
Silver ETFs brought in Rs 1,904 crore but AUM slipped from Rs 22,963 crore to about Rs 22,000 crore as prices corrected. Index funds received Rs 2,330 crore, yet AUM declined from Rs 3.09 lakh crore to Rs 3.06 lakh crore. Other equity ETFs saw inflows of Rs 4,477 crore but saw AUM fall from Rs 8.59 lakh crore to Rs 8.44 lakh crore in line with the market drop.
On Gold ETF's Nehal Meshram, Senior Analyst - Manager Research, Morningstar Investment Research India noted that while the inflows had moderated it was still the third consecutive month of positive flows.
"The sustained demand reflects gold’s continued appeal as a portfolio diversifier amid lingering macro uncertainties, including volatile global interest rate expectations and geopolitical risks. While prices have remained elevated, investor interest appears supported by central bank buying trends globally and persistent concerns over equity market volatility. Domestic investors are also likely viewing gold allocations as a tactical hedge ahead of key economic data releases and policy decisions in the coming months," she said.
Sectoral & Thematic Funds Lead Equity Inflows
Sectoral and thematic funds drew the largest share of equity inflows at Rs 9,426 crore, around 22 percent of the month’s total. While AUM stayed flat at Rs 5.10 lakh crore due to MTM erosion, flows were concentrated in strategies focusing on infrastructure, banking & financial services, and technology. Experts say that this reflects a willingness among investors to make targeted allocations despite volatility, suggesting a maturing approach to equity diversification.
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