Equity fund inflows rise by 17% to ₹40,608 crore in June, a fresh high: AMFI data

Inflows into large-caps rose 46% to 9.7 billion rupees, a three-month high, supported by policy continuity and macroeconomic stability.

Inflows into India's equity mutual funds rose 17% to a record high of 406.08 billion rupees (about $5 billion) in June as per data from the Association of Mutual Funds in India (AMFI). Since 2021, equity mutual funds have seen net inflows aggregating to 5.99 trillion rupees from domestic investors which is well above net foreign inflows of 333.61 billion rupees over the same period, data showed.

Since 2021, equity mutual funds have seen net inflows aggregating to 5.99 trillion rupees from domestic investors.

During this time, the benchmark NSE Nifty 50 has risen owing to sustained mutual fund inflows, steady earnings and fast macroeconomic growth. Inflows into large-caps rose 46% to 9.7 billion rupees, a three-month high, supported by policy continuity and macroeconomic stability, data showed. For small-caps and mid-caps, inflows moderated 16% and 3%, respectively at 22.63 billion rupees and 25.28 billion rupees in June.

Harsha Upadhyaya, chief investment officer and president at Kotak Mahindra Asset Management, said as per Reuters, “Bulk of the mutual fund flows went to small- and mid-caps from large-cap funds over the last two years, as investors chased performance.”

Valuation excesses have been more in small- and mid-caps over large-caps, which is forcing investors to diversify their allocations to large- and multi-cap funds, he said.

Additionally, data showed that multi-cap or diversified equity funds saw inflows worth 47.09 billion rupees, a 27-month high and sectoral or thematic funds saw the most inflows among equity mutual fund schemes for the second straight month at 223.52 billion rupees.

In June, India's stock benchmarks Nifty 50 and BSE Sensex rose about 7% each, logging their best month this year so far. Moreover, contributions to systematic investment plans (SIPs) touched a record high of 212.62 billion rupees in June- an all-time high for 12th consecutive month.