Equity Mutual Fund Inflows Rise 24% in June; Gold ETFs Shine Bright

June brought a welcome rebound for the mutual fund industry as equity fund inflows surged 24% month-on-month, touching ₹23,568 crore, according to data released by the Association of Mutual Funds in India (AMFI) on July 9. This comes after a sharp 22% fall in inflows during May, signalling a return of investor confidence despite lingering global uncertainties.

The gains in June were supported by stable market benchmarks—the Nifty rose 2.7% and the Sensex was up 3.1%. Even with ongoing geopolitical tensions and trade-related worries, investor sentiment seemed cautiously optimistic.

Gold ETFs See Massive Jump

One of the biggest highlights was the performance of Gold ETFs, which saw inflows of ₹2,081 crore in June. That’s a tenfold jump from the previous month, making it a five-month high. This surge reflects renewed interest in gold as a safe-haven asset, especially during times of market and political uncertainty.

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Mutual Fund AUM Touches New High

Thanks to mark-to-market gains in equities, the total assets under management (AUM) of the mutual fund industry rose to ₹74.4 lakh crore in June. This is up from ₹72.20 lakh crore in May and ₹69.99 lakh crore in April — a strong upward trend that showcases the resilience of the Indian mutual fund space.

However, New Fund Offers (NFOs) took a hit, with inflows falling by 52% to ₹1,986 crore in June, compared to ₹4,170 crore in May.

Category-Wise Equity Fund Flows

Among equity mutual funds, small-cap and mid-cap categories led the inflow charts, showing that investors are still bullish on broader market opportunities:

• Small Cap Funds: ₹4,024.5 crore in June, up 25% from May

• Mid Cap Funds: ₹3,754 crore, up 34% month-on-month

• Large Cap Funds: ₹1,694 crore, up 35% compared to the previous month

However, not all categories fared equally well:

• Sectoral/Thematic Funds witnessed a major drop, with inflows falling 77% to ₹475.61 crore, down from ₹2,052.5 crore in May.

• ELSS Funds continued to see outflows of ₹556 crore, though slightly better than the ₹678 crore outflow seen in May.

• Dividend Yield Funds saw a turnaround, posting inflows of ₹45.55 crore, recovering from an outflow of ₹20.82 crore the previous month.

Read Also: Markets Cheer Trade Deal Hopes as Nifty Crosses 25,500

What This Means for Investors

The overall increase in equity mutual fund inflows indicates renewed retail interest in the markets. While some investors are still turning to gold as a hedge, especially during volatile times, the rise in small-cap and mid-cap investments shows a growing risk appetite in the hope of long-term gains.

The contrasting decline in thematic and NFO investments suggests that investors may be more selective and cautious in picking new or niche funds.

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