“Equity MFs staged a strong comeback in June after falling nearly 40 per cent in May. The recovery underscores the resilience of investor sentiment amid global uncertainties and periodic bouts of market volatility,” said Sanjay Agarwal, senior director at CareEdge Ratings.
Despite bouts of volatility, the equity market ended June on a positive note, with the Nifty50 gaining 1.4 per cent as easing oil prices and receding tensions in West Asia lifted sentiment.
Net inflows into equity schemes are largely driven by the quantum of one-time (lump-sum) investments and total redemptions, as gross systematic investment plan (SIP) inflows tend to remain relatively stable.
Gross investments into equity schemes last month were up 17 per cent compared with May, while gross SIP inflows, which include flows into schemes across equity, debt, hybrid and passive funds, were up 3 per cent MoM to Rs 31,781 crore. Equity schemes account for about 80 per cent of SIP inflows.
The stable SIP inflows and strong lump-sum flows in some periods took cumulative net investments into equity-oriented schemes in the first half (H1) of calendar year (CY) 2026 to Rs 1.81 trillion, up around 12 per cent from the corresponding period last year.
“Investor confidence remains resilient despite ongoing global uncertainties and periodic market volatility. Improved market sentiment, expectations of supportive domestic macroeconomic conditions, and continued strength in retail participation helped support flows,” said Nehal Meshram, senior analyst at Morningstar Investment Research India.
The net inflows, however, were concentrated in select scheme categories through H1. Flexicap, midcap and smallcap funds have attracted the bulk of inflows in recent months. In June, the three categories garnered net inflows of Rs 16,900 crore, which was nearly 60 per cent of total net equity inflows.
Apart from the rise in lump-sum flows into equity schemes, there were positives in other areas as well in June. Net new SIP account openings surged to a multi-month high of 487,000. Gold and silver exchange-traded funds (ETFs), which had been seeing outflows in recent months, garnered strong inflows in June.
“Another notable trend was the strong resurgence in ETFs and Gold ETFs. ETF inflows of over Rs 13,200 crore and Gold ETF inflows of Rs 3,443 crore point towards investors increasingly using passive products and gold as strategic portfolio allocation tools rather than tactical trades,” said Suranjana Borthakur, head of distribution and strategic alliances at Mirae Asset Investment Managers (India).