Equity Rally Sustains Record SIP Growth as Market AUM Climbs Despite Debt Fund Redemptions
The mutual fund industry witnessed a resilient June, with overall Assets Under Management (AUM) rising by 0.79 percent month-on-month to ₹82.22 lakh crore. This growth was primarily fueled by strong inflows into equity and hybrid funds, underscoring sustained retail investor confidence. While the overall picture was positive, debt mutual funds faced significant outflows due to expected quarter-end treasury management.Equity Inflows Extend Record Streak as Mid-Caps Lead Rally
Equity mutual funds attracted net inflows of ₹28,973 crore in June, a notable increase from the ₹22,908 crore seen in May. This performance extends the industry’s uninterrupted streak of positive equity inflows to 64 consecutive months. Investors are actively participating across various segments, with mid-cap funds attracting the largest share of inflows at ₹6,090 crore.Small-cap and flexi-cap categories also saw robust appetite, pulling in ₹5,602 crore and ₹5,231 crore respectively. Furthermore, thematic and sectoral investments made a powerful comeback in June, recording net inflows of ₹1,469 crore, representing a 126.8% surge month-on-month.
Experts noted that the significance lies not just in the monthly increase but in the continuity of positive flows. Nitin Agrawal, CEO of Mutual Funds at InCred Money, stated that equity schemes have consistently attracted positive capital despite market corrections and geopolitical uncertainty.
Debt Fund Outflows Ascribed to Seasonal Treasury Movements
In contrast to the equities performance, debt mutual funds faced pressure, recording net outflows totaling ₹1.09 lakh crore. The assets in this category declined by 4.8 percent, reaching ₹17.38 lakh crore. Liquid funds accounted for the largest redemptions at ₹42,293 crore, followed by low-duration (₹16,484 crore) and ultra-short duration funds (₹11,426 crore).Industry veterans stressed that these outflows are largely seasonal noise rather than a fundamental shift in investor sentiment. Suranjana Borthakhur of Mirae Asset Investment Managers pointed out that the liquid fund movement reflected typical quarter-end treasury transactions. Echoing this view, Agrawal added that the bulk of redemptions stemmed from corporate treasury cycles linked to liquid and overnight schemes.
Retail Participation Anchored by Record SIP Contributions
Despite global market volatility, Systematic Investment Plan (SIP) contributions continued to anchor retail participation, hitting an all-time high of ₹31,781 crore for the month. This figure surpassed the previous record set in May (₹30,954 crore). The number of contributing SIP accounts also increased to 9.78 crore from 9.64 crore.The continued robustness of retail participation suggests a maturation among investors focused on long-term wealth creation. Retail assets under management across equity, hybrid, and solution-oriented schemes rose to ₹49.41 lakh crore. This growth confirms the expanding retail footprint within the mutual fund industry.
Alternative Investments and Specialized Funds Gain Momentum
Specialised Investment Funds (SIFs) showed strong momentum in June, with their AUM rising 29.3 percent month-on-month to ₹17,858 crore. Net inflows into SIFs totaled ₹3,782 crore, led by hybrid strategies and equity-oriented schemes.Gold ETFs staged a significant rebound, attracting net inflows of ₹3,443 crore after previous outflows. Nehal Meshram, Senior Analyst at Morningstar Investment Research India, noted that this recovery reflects renewed demand for safe-haven assets amid geopolitical concerns. Silver ETFs also garnered investor interest, seeing fresh allocations of ₹4,286 crore.
Fund Launches Remain Measured as Industry Expands Distribution
The mutual fund industry maintained a measured approach regarding new product launches (NFOs), with seven offerings collectively mobilizing ₹460 crore. The specialized investment segment was more active, with six new products launched by fund houses across equity-oriented and hybrid strategies, raising around ₹1,744 crore.Overall industry AUM stood at ₹82.22 lakh crore, a slight increase from the previous month. SIP assets increased to ₹17.70 lakh crore, which accounted for approximately 21.5 percent of the total industry AUM, cementing their critical role in capital formation.
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