Inflows into India’s equity mutual funds moderated in July to Rs 37,113 crore ($4.42 billion), easing off record high levels hit in the previous month, data from the Association of Mutual Funds in India (AMFI) showed on Friday.
The 9 per cent drop in July from the previous month was due to profit booking at record high levels, analysts said.
Inflows in July are the second highest on record and positive for domestic equities from a liquidity perspective, said Venkat Chalasani, CEO of AMFI.
Inflows into large-cap mutual funds moderated 31 per cent to Rs 670 crore.
Inflows into mid-caps fell 35 per cent to Rs 1,644 crore, while small-cap equity mutual fund inflows were little changed at Rs 2,109 crore in July.
Multi-cap or diversified equity funds, which invest across different stocks to minimise the risk of exposure to a few stocks, reported a 50.5 per cent jump in inflows to Rs 7,085 crore.
Sectoral or thematic funds saw the highest inflows among equity mutual fund schemes for the fourth straight month at Rs 22,452 crore, about 50 per cent of total inflows into equity-oriented schemes.
“The high inflows into sectoral funds could be attributed to new fund offer (NFO) listing. Most of the lumpsum purchase seem to be through the NFO route,” said Manish Mehta, national head of sales, marketing and digital at Kotak Mahindra Asset Management.
Two new fund offers in July garnered inflows of Rs 9,790 crore, according to AMFI.
Equity mutual funds reported net inflows aggregating to Rs 6.36 lakh crore from domestic investors since February 2021, well above net foreign inflows of Rs 65,726 crore into mutual funds over the same period.
Indian mutual funds have reported inflows every month since February 2021.
The country’s benchmark NSE Nifty 50 has risen about 72 per cent over the last 41 months.
Contributions to systematic investment plans (SIPs) touched a record high of Rs 23,322 crore in July, hitting an all-time high for the thirteenth consecutive month.
