Hybrid funds maintain Rs 20,879 crore inflows in July, AUM tops Rs 10 lakh crore

Aggressive hybrid and equity savings funds maintained stable flows, aided by consistent SIP contributions.

Hybrid mutual funds continued to attract steady inflows in July, with investors pumping in Rs 20,879 crore across categories. This was slightly lower than the Rs 23,223 crore recorded in June but well ahead of the Rs 17,436 crore posted in July 2024.

Anuj Kesarwani, founder of Zenith Finserve, “Hybrid funds have become a good hiding place for investors with moderate risk and returns. The increasing flows in them is a reflection of investors' acceptance of subdued returns from the equity markets from September last year. As long as the uncertainty continues, the flows in hybrid funds are expected to increase.”

The segment’s total assets under management or AUM reached Rs 10.03 lakh crore, rising Rs 2,298 crore from June and Rs 1.56 lakh crore from a year ago. Arbitrage funds led inflows, supported by favourable cash-futures spreads, making them a preferred choice for investors seeking tax-efficient returns. Balanced advantage funds also drew significant allocations, leveraging their ability to shift dynamically between equity and debt based on market conditions.

Also read | Debt funds see Rs 1.07 lakh crore net inflows in July, led by liquid, money market categories

Aggressive hybrid and equity savings funds saw stable flows, aided by consistent contributions into systematic investment plans or SIPs. The data showed hybrid funds gaining traction among investors seeking a blend of growth and stability, particularly during periods of market uncertainty.

Lt Col Rochak Bakshi (retd.), founder, True North Finance, a financial and investment planning firm based in Pune says, “As valuations in the equity markets remain relatively high compared to their historical averages, investors are finding comfort in hybrid funds such as balanced advantage funds, equity savings funds, and arbitrage funds. These funds are, to a certain extent, insulated from volatile moves in the capital markets and are also tax-efficient.”

With both equity and debt markets offering opportunities, hybrid strategies are expected to remain an attractive middle ground, balancing volatility with income generation potential.