Equity MF Inflows Hit Four-Month High in August, Rise 18.8% on Month

Equity mutual fund inflows rose 18.8% month-on-month to ₹293.29 billion in August, the highest level in four months, reversing part of the decline seen in July when inflows stood at ₹246.85 billion.

The recovery came as investors increased allocations across several equity categories, with small-cap, mid-cap and multi-cap funds accounting for a significant share of the inflows. The August data also showed continued interest in exchange-traded funds, while debt schemes turned negative after a large inflow in July.

Small-cap funds recorded the highest inflow among core market-cap categories at ₹79.73 billion, compared with ₹77.68 billion in July. Mid-cap funds received ₹69.89 billion, up from ₹61.92 billion, while large-and-mid-cap funds attracted ₹38.73 billion.

Flexi-cap funds saw inflows of ₹50.59 billion, while multi-cap funds received ₹37.33 billion. Thematic funds recorded inflows of ₹17.66 billion.

Large-cap funds, however, remained in negative territory for the second consecutive month. The category recorded an outflow of ₹11.47 billion in August after an outflow of ₹13.22 billion in July. Sectoral funds also saw a marginal outflow of ₹5.32 billion.

ELSS funds recorded an outflow of ₹10.78 billion, compared with an outflow of ₹9.59 billion in July, while dividend yield funds saw withdrawals of ₹13.36 billion.

The rebound in equity flows was accompanied by a reversal in debt fund flows. Debt-oriented schemes recorded a net outflow of ₹81.27 billion in August, compared with an inflow of ₹1.87 trillion in July. Liquid funds, which had accounted for most of July's debt inflows, recorded an inflow of ₹199.34 billion in August, while overnight funds saw an outflow of ₹30.65 billion.

Hybrid schemes continued to attract investors, although inflows moderated to ₹100.45 billion in August from ₹114.90 billion in July. Arbitrage funds led the category with inflows of ₹37.89 billion, followed by multi-asset allocation funds at ₹36.71 billion.

ETF flows increased to ₹101.61 billion from ₹95.12 billion in July. Gold ETFs attracted ₹25.97 billion, up from ₹15.59 billion, while silver ETFs received ₹12.71 billion. Equity ETFs accounted for ₹72.37 billion of net inflows.

Overall open-ended schemes recorded a net inflow of ₹424.66 billion in August. Total industry assets under management rose to ₹87.08 trillion at the end of August, compared with ₹85.76 trillion in July.

The August data points to a recovery in equity allocations after July's moderation, while the large-cap segment remained under pressure and debt flows normalised following the July surge.