India's large-cap funds attracted the highest inflows among all mutual fund segments in June 2026, pulling in ₹9,656 crore even as they remained the worst-performing category year-to-date, down 5.4%, according to a report by Vallum Capital. The divergence between investor behaviour and performance is being attributed primarily to the momentum of SIP-led automatic flows.

Segment-wise Inflows and Performance

Mid-cap funds recorded the sharpest month-on-month increase in inflows, rising by over ₹1,336 crore. Small-cap funds attracted ₹4,508 crore in inflows and posted the strongest year-to-date return at 9.3% — outperforming large-caps by a wide margin. Despite this outperformance, small-cap inflows trailed those of large-caps, underlining how systematic investment plans continue to anchor flows toward the larger category regardless of near-term returns.

Overall Mutual Fund Flows Moderate in June

Total net asset-level inflows moderated to ₹48,826 crore in June, down 14% month-on-month from ₹56,886 crore in May. Equity inflows strengthened to ₹48,914 crore, up ₹3,215 crore over May, even as equity returns remained modest at 1.8%. Fixed Income witnessed net outflows of ₹51,489 crore, while Money Market outflows deepened to ₹57,277 crore, indicating institutional liquidity continued rotating out of defensive assets.

Healthcare Standout; Gold Attracts Dip Buyers

The healthcare sector remained the standout theme of 2026, delivering nearly 15% year-to-date returns. In an uncertain macroeconomic environment, investors continued to favour businesses with relatively predictable cash flows — including hospitals, diagnostics, and pharmaceuticals. The sector also saw a ₹294 crore increase in inflows during June.

Precious Metals attracted net inflows of ₹8,678 crore despite delivering a negative 6.3% return during the month, suggesting investors used the price correction to accumulate gold rather than exit the asset class. Real Estate gained 14.4% in July, effectively erasing a year's worth of losses within 30 days.

Sector Divergences: Banks, Technology, Consumption

Private banks saw a surge of ₹802 crore in fresh inflows last month, even as broader banking indices recorded outflows. Technology funds, despite being down 17.3% year-to-date, continued to attract dip buyers. Meanwhile, the broader consumption category witnessed outflows in June despite positive one-month returns across most consumption segments. FMCG remains among the weakest-performing themes, down 12.4% year-to-date.

The data collectively points to a market where retail investors, anchored by SIPs, are holding steady in large-caps, while tactical money is selectively rotating into beaten-down sectors such as technology and private banking — a pattern that will be closely watched heading into the second half of 2026.