Fund flows into India’s equity mutual funds soared to a record last month, industry data showed on Monday, as local investors bought the market dip triggered by U.S.-India trade uncertainty and muted corporate earnings.
Net flows into equity schemes rose 81% month-on-month to 427.02 billion rupees ($4.9 billion) in July, data from the Association of Mutual Funds in India (AMFI) showed.
Overall, assets under management in the MF industry hit a record high at 75.36 trillion rupees.
Contributions via systematic investment plans (SIPs) – a popular periodic investment route for MF investors - rose to a record 284.64 billion rupees. The number of contributing SIP accounts also climbed to 91.1 million from 86.4 million in June.
“Intermittent market corrections on the back of tariff war with the U.S. as well as ongoing geopolitical tension offered investors attractive entry points,” said Himanshu Srivastava, principal, manager research at Morningstar Investment Research.
Equity MFs saw inflows for the 53rd month in a row, even as foreign investors pulled out $2 billion from the stock market in July on lingering uncertainty about a U.S.-India trade deal and worries over another quarter of weak earnings.
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These inflows helped the benchmark stock indexes trim their losses. The Nifty fell 2.9% last month, with small-caps and mid-caps sliding 5.8% and 3.9%, respectively.
Large-cap funds attracted 21.25 billion rupees, up 25.5% from June, while mid-cap allocations rose 38% to 51.82 billion rupees and small-cap inflows jumped 61% to 64.84 billion rupees.
“The rise in mid-cap, small-cap, and sectoral fund participation signals a growing appetite for diversified growth,” said A Balasubramanian, MD and CEO at Aditya Birla Sun Life AMC.
“It’s a testament to the maturity of Indian market in a heightened period of uncertainty.”
Inflows into Gold Exchange and Silver Exchange Traded Funds were at 12.56 billion rupees and 19.04 billion rupees, respectively.
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