Equity MF inflows tumble 15% to `24,697 crore amid caution

INVESTORS TURN SELECTIVE | SIP contributions hold firm despite volatility

Business Desk

MUMBAI

Indian equity mutual fund inflows fell 15% month-on-month to ₹24,697 crore in July as concerns over valuations and subdued market returns made investors more selective, but resilient systematic investment plan contributions signalled that retail appetite for equities remained intact.

The decline from ₹28,973 crore in June points to caution over fresh allocations rather than a broader retreat from equities, with equity-oriented schemes recording positive net inflows for the 65th consecutive month, data from the Association of Mutual Funds in India (AMFI) showed.

Inflows were, however, well below the ₹42,702 crore recorded in July last year.

Monthly SIP contributions edged up to ₹31,961 crore from ₹31,781 crore in June and remained above ₹31,000 crore for a fifth consecutive month.

The contrast between declining overall equity inflows and steady SIP contributions suggests investors are continuing long-term allocations while becoming more cautious about deploying additional lump-sum money at current valuations.

“The moderation in equity mutual fund inflows reflects a degree of selectivity rather than a loss of investor confidence in equities,” said Ankur Punj, MD and Business Head at Equirus Wealth.

Akhil Chaturvedi, Executive Director and Chief Business Officer at Motilal Oswal Asset Management Company, attributed some of the caution to relatively weak equity returns over the past two years.

Smallcap funds continued to attract the largest share of fresh equity money, receiving ₹7,768 crore. Midcap funds drew ₹6,192 crore, while flexicap schemes garnered ₹4,710 crore. Largecap funds received ₹1,322 crore. The distribution suggests investors remain willing to take risk despite valuation concerns, although allocations are increasingly concentrated in segments where they see stronger long-term return potential.

Santosh Joseph, CEO of Germinate Investor Services, said investor interest in diversified equity categories remained steady.

The broader mutual fund industry swung to net inflows of about ₹2.36 lakh crore in July from net outflows of ₹52,949 crore in June, largely because of a sharp reversal in debt schemes.

Debt-oriented funds attracted around ₹1.88 lakh crore after witnessing ₹1.09 lakh crore of outflows in June. Liquid funds led with ₹1.19 lakh crore of inflows, followed by overnight funds at ₹40,413 crore and money-market funds at ₹21,180 crore. Varun Gupta, CEO of Groww Mutual Fund, said the trend showed investors were favouring “liquidity and flexibility” rather than taking significant duration risk.