Net inflows in equity mutual funds increased 24% to ₹23,587 crore in June, according to data from Association of Mutual Funds in India (AMFI).
Net inflows had dipped 22% to ₹19,000 crore in May, which was the lowest in about a year. The data for this month is seen a reversal of the trend in the month before.
“While market volatility has made some investors cautious, we’re also witnessing a healthy shift towards hybrid and arbitrage funds a trend that shows maturing investor behaviour and a preference for balanced risk strategies in uncertain times,” said Venkat Chalasani, Chief Executive Officer of AMFI in a statement.
Amount contributed through Systematic Investment Plans( SIP) increased to ₹27,269 crore, which is over 2% more than the previous month.
Experts are divided on the reason behind this robust growth in MF inflows.
One group of experts say that the rise in net inflows into equity is an outcome of “investor confidence in India’s long-term growth,” and the performance of mid and small cap stocks. “The uptick in hybrid strategies also suggests that investors are increasingly seeking a balance between growth and risk mitigation—a healthy sign of evolving market maturity,” said Ankur Punj MD and National Head Equirus Wealth.
Some others say that this is retail investors buying while being agnostic to prices. Analysts said stocks like defence, capital goods which are moved up more on narratives than by fundamentals, outperformed the broad market in the past three months.
“The price-agnostic inflows from retail households into domestic equity mutual funds have resulted in continued buying by DIIs, even as FPIs have been ‘negative’,” said the researchers at Kotak Institutional Equities in a report. They further said that FPIs and promoters were reducing stakes in companies and retail investors were buying these stocks without considering their valuation. To be sure, analysts have already sounded that Indian markets are richly valued in comparison to their earnings so far.
Published – July 09, 2025 09:21 pm IST
