Why Did Equity Mutual Funds Witness Record Inflows of Rs 42,702 Crore in July?
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Synopsis
In an unprecedented surge, equity mutual funds have experienced net inflows of Rs 42,702 crore in July, marking an 81 percent rise from June. This article delves into the driving factors behind this remarkable growth, including retail participation and new fund offerings, highlighting key trends across various fund categories.
Key Takeaways
- Equity mutual funds recorded Rs 42,702 crore in inflows for July.
- The inflows marked an 81% increase from June.
- New fund offerings (NFOs) contributed significantly to the record inflows.
- Smallcap schemes saw a 61% increase in inflows.
- Retail participation is on the rise, with folios increasing to 24.57 crore.
New Delhi, Aug 11 (NationPress) Equity-focused mutual funds recorded an impressive net inflow of Rs 42,702 crore in July, signifying an 81 percent increase from Rs 23,587 crore in June, according to data released by the Association of Mutual Funds in India (AMFI).
As of end-July, the mutual fund sector's net assets under management (AUM) surged to Rs 75.36 lakh crore, rising from Rs 74.40 lakh crore in June and Rs 72.19 lakh crore in May, based on AMFI's monthly statistics.
Equity funds have experienced consistent positive inflows for 53 months in a row, with July's inflows being widespread across various categories. The record monthly influx was primarily propelled by new fund offerings (NFOs), which amassed Rs 30,416 crore—the highest NFO collection ever recorded.
Smallcap schemes led the charge with Rs 6,484 crore added to AUM in July, a significant rise from Rs 4,024 crore in June, marking a 61 percent increase.
Largecap funds saw inflows of Rs 2,125 crore in July, up from Rs 1,694 crore in June—this represents a 25 percent month-on-month increase. Meanwhile, mid-cap inflows rose by 38 percent on a month-on-month basis.
Flexicap funds attracted Rs 7,654 crore, reflecting a 33.5 percent jump in inflows. Additionally, sectoral and thematic funds saw a notable increase, bringing in Rs 9,426 crore in July, an increase of 15 percent month-on-month.
Retail participation has also grown, with the total number of mutual fund folios rising to 24.57 crore in July from 24.13 crore in June.
However, ELSS schemes continued to experience net outflows, with Rs 368 crore withdrawn in July, down from Rs 556 crore in June.
Hybrid funds enjoyed more inflows than the previous month, while arbitrage funds noted a dip in inflows.
Open-ended debt funds recorded net inflows of Rs 1,06,801 crore during the month, with both money market and liquid funds experiencing a significant upsurge in inflows.
Akhil Chaturvedi, Executive Director and Chief Business Officer at Motilal Oswal Asset Management Company, noted a growth of over 25 percent across categories, from largecap to flexicap to smallcap.
“Indian retail investors are maturing and are now seriously considering equities as a meaningful part of their portfolios,” he added.
Point of View
It is evident that the remarkable inflows into equity mutual funds reflect a growing confidence among retail investors in India. This trend not only showcases the resilience of the market but also the increasing sophistication of investors who are diversifying their portfolios. The consistent growth in AUM indicates a positive outlook for the mutual fund industry.
NationPress
30/08/2025
Frequently Asked Questions
What were the net inflows in equity mutual funds for July?
Equity mutual funds saw net inflows of Rs 42,702 crore in July, which is an 81% increase from the previous month.
What factors contributed to the record inflows?
The record inflows were driven by new fund offerings (NFOs) and increased retail participation in equity markets.
How have smallcap schemes performed?
Smallcap schemes led the inflows with Rs 6,484 crore added in July, marking a significant 61% increase from June.
What is the current AUM for mutual funds?
As of the end of July, the net assets under management (AUM) for the mutual fund industry stood at Rs 75.36 lakh crore.
Did ELSS schemes experience inflows or outflows?
ELSS schemes continued to record net outflows, with Rs 368 crore withdrawn in July.
