Equity mutual fund net inflows were down 14.75% month-on-month to ₹24,697 crore this July as investors preferred debt-oriented schemes, according to data from Centre for Monitoring Indian Economy (CMIE).
The road for equity mutual fund schemes has been bumpy since the start of 2026, with net inflows declining in four of the first seven months. Despite the decline, equity-oriented schemes recorded their 65th consecutive month of positive inflows in July.
“This likely reflects the market recovery in recent months, a rally led by IT stocks, supported by the return of FII flows after months of selling, and encouraging June-quarter earnings, all of which have reduced the urgency to invest during dips,” said Suranjana Borthakur- Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers.
Indicating the gaining popularity of debt mutual funds among investors, their inflows increased to ₹1.88 lakh crore, a month after the category witnessed an outflow of more than ₹1 lakh crore. Liquid funds were the biggest beneficiaries, garnering net inflows of ₹1,19,066 crore, followed by overnight funds ₹40,413 crore and money market funds ₹21,180 crore. in the review period
“The turnaround was driven primarily by large allocations into liquidity-oriented categories, suggesting the return of corporate treasury and institutional surplus money at the beginning of the quarter, rather than a broad-based change in investor sentiment toward longer-duration fixed-income strategies,” said Nehal Meshram, Senior Analyst, Morningstar Investment Research India.
Inflows through systematic investment plan (SIP), had seen a miniscule increase of 0.56% in net inflows to ₹31,961 crore, in the previous month, as investors became selective and adopted a more cautious approach, with money continuing to enter equities but at a slower pace.
Among the equity categories, smallcap funds led the inflows, attracting ₹7,768 crore in July, followed by midcap funds with ₹6,192 crore and flexicap funds with ₹4,710 crore. Largecap funds received ₹1,322 crore in the review period.
