“The lower impact of the new flow, viz, the previous month, roughly ₹9,000 crore, is to the extent of NFOs, which were higher in July than in August.” said Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal AMC, adding that the flow momentum has been steady otherwise. “Given the past trends, I had hoped for a higher SIP number, which is now flat at around ₹27,000 crore. Broadly, Indian investors continue to add equities to their allocation despite global headwinds and FII selling, and this is very positive for the markets,” he added.
August’s resilience in flows can essentially be put down to continued momentum through Systematic Investment Plans (SIPs), which saw strong monthly contributions persist.
“Retail investors, in particular, remained consistent in their allocations, undeterred by global volatility. Additionally, growing optimism around India’s economic outlook, aided by reforms such as GST rationalisation and expectations of corporate earnings recovery, further supported domestic equity flows. Additionally, market volatility and intermittent corrections created attractive entry points for investors, encouraging fresh investments during the month,” said Himanshu Srivastava, Principal and Manager-Research, Morningstar Investment Research India.
Diversification trends kept influencing investor behaviour, with investments spread across large-cap, mid-cap, and small-cap funds, and a noticeable preference for strategies with higher exposures to mid- and small-cap assets.
Within categories, flexi-cap funds continued to be the biggest beneficiary, surpassing last month’s all-time high net inflows of ₹7,654 crore with a new record of ₹7,679 crore in August. Mid- and small-cap funds also saw robust interest, attracting net inflows of ₹5,331 crore and ₹4,993 crore, respectively.