
Equity Fund Inflows Surge 24% to Rs 23,587 Crore in June: AMFI Reports Strong Recovery
India's mutual fund industry witnessed a remarkable turnaround in June 2025, with equity fund inflows rising 24% to Rs 23,587 crore, according to the latest data released by the Association of Mutual Funds in India (AMFI) on July 9. This significant recovery comes after a sharp 22% decline recorded in May, demonstrating renewed investor confidence in equity markets.
Market Performance Drives Investor Optimism
The surge in equity investments coincided with positive market performance during June. The Nifty gained 2.7% while the Sensex rose 3.1%, despite ongoing global trade tensions and geopolitical uncertainties in the Middle East. This stability appeared to boost investor sentiment and encourage fresh capital deployment into equity funds.
The strong performance was reflected in the industry's overall assets under management (AUM), which reached an all-time high of Rs 74.41 lakh crore in June, compared to Rs 72.20 lakh crore in May and Rs 69.99 lakh crore in April. This growth was primarily driven by mark-to-market gains in equity holdings.
SIP Investments Hit New Record High
Systematic Investment Plan (SIP) inflows demonstrated exceptional resilience, reaching a new record of Rs 27,269 crore in June 2025. This represented a 2.2% increase from May's Rs 26,688 crore and a 5.2% rise from March levels, highlighting the growing discipline among retail investors.
The number of active SIP accounts expanded from 8.56 crore to 8.64 crore in June, with SIP assets under management climbing to Rs 15.31 lakh crore. Notably, SIPs now account for 20.6% of the mutual fund industry's total assets, up from 20.2% in May.
Category-wise Performance Analysis
Equity Fund Categories Show Strong Growth
Different equity fund categories exhibited varying levels of investor interest:
- Small Cap Funds led the charge with inflows of Rs 4,024.5 crore, up 25% from Rs 3,214 crore in May
- Mid Cap Funds recorded Rs 3,754 crore in inflows, marking a 34% month-on-month increase
- Large Cap Funds attracted Rs 1,694 crore, rising 35% from the previous month
- Sectoral/Thematic Funds saw a significant decline, with inflows dropping 77% to Rs 475.61 crore
Mixed Performance in Specialized Categories
ELSS (Equity Linked Savings Scheme) funds continued to experience challenges, with outflows of Rs 556 crore in June, though this was an improvement from May's Rs 678 crore outflows. Dividend Yield Funds showed a positive turnaround, posting inflows of Rs 45.55 crore after experiencing outflows in the previous month.
ETF and Hybrid Fund Developments
The Exchange Traded Fund (ETF) segment witnessed dramatic shifts in investor preferences. Gold ETFs experienced remarkable growth with inflows of Rs 2,080.9 crore, representing a massive 613% surge from May's Rs 292 crore. This surge likely reflects investors' hedge against economic uncertainty.
Hybrid funds maintained their appeal, with inflows rising to Rs 23,223 crore from Rs 20,765 crore in May. Arbitrage funds remained popular, attracting Rs 15,584 crore in inflows, though slightly lower than May's Rs 15,702 crore.
Debt Fund Market Dynamics
The debt fund segment showed mixed performance across different duration categories:
- Short Duration Funds saw exceptional growth, jumping 474% to Rs 10,277 crore
- Ultra Short Duration Funds rose 59% to Rs 2,944 crore
- Liquid Funds continued heavy outflows of Rs 25,196 crore, though down from May's Rs 40,205 crore
- Corporate Bond Funds attracted Rs 7,124 crore, though 41% lower than May
Industry Outlook and Expert Perspectives
Venkat Chalasani, Chief Executive of AMFI, expressed confidence in the industry's trajectory, emphasizing their commitment to establishing a robust mutual fund framework with standardized disclosure protocols and ongoing investor education initiatives.
Naval Kagalwala from Shriram Wealth Ltd highlighted that 65.7% of growth came from Equity & Hybrid schemes, representing growing interest in Indian equity markets. However, he cautioned that 25% of monthly growth was concentrated in higher-risk Mid, Small & Sectoral/Thematic schemes, advising investors to diversify across categories and asset classes.
Retail Investor Participation
The retail segment showed strong engagement with total mutual fund folios reaching 24.13 crore as of June 2025. Retail mutual fund folios across equity, hybrid, and solution-oriented schemes increased to 19.07 crore in June from 18.84 crore in May, with retail AUM standing at Rs 43.99 lakh crore.
Market Implications and Future Trends
The June data suggests a maturing investor base with preferences shifting toward balanced risk strategies. The significant inflows into hybrid and arbitrage funds indicate that investors are seeking diversified exposure while maintaining equity participation.
The record-breaking SIP inflows demonstrate the growing adoption of disciplined investment approaches among retail investors, which bodes well for long-term market stability and growth.
New Fund Offers (NFOs) saw a decline in interest, with inflows of Rs 1,986 crore representing a 52% drop from May's Rs 4,170 crore, suggesting investors are favoring established funds over new launches.
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