According to data from the Association of Mutual Funds in India (Amfi), mutual funds saw net inflows of Rs 7,600 crore into active equities schemes in July despite redemptions rising to a 30-month high of Rs 30,400 crore due to profit booking.
Net equity inflows were 13% lower than they had been the previous month.
Strong flows from retail investors via the systematic investment plan (SIP) route helped to support the inflows.
SIP inflows, which have been steadily increasing since early 2021, have for the first time surpassed Rs 15,000 crore.
"Across all scheme categories, the increase in retail investors' interest in mutual funds has resulted in excellent inflows.
SIPs have been the industry's top performer this month, according to NS Venkatesh, CEO of the trade group Amfi. The largest monthly SIP registration ever of 3.3 million preceded the record SIP inflows, bringing the total number of active SIP accounts to 68 million.
Even though certain fund houses restricted lump sum contributions in their small-cap schemes, small-cap funds continued to be the top draw for investors, bringing in Rs 4,170 crore.
The Nifty small-cap 100 had increased by about 10% the previous month.
For the third consecutive month, net withdrawals were recorded from the two largest active equity fund categories, large-cap and flexi-cap.
Since May, monthly redemptions have been over Rs 27,000 crore, which is about 50% greater than the outflows recorded in the preceding three months. This indicates that investors have been booking profits for the past three months.
To profit from the tremendous increase in the share market that has been going on since March, investors have been taking money out of equities schemes.
The benchmark Nifty50 index has increased by approximately 14% over the course of the last five months, commencing in March.
The fact that the equity market is at record highs has prompted investors to book profits, according to Manish Mehta, national head of sales, marketing, and digital business at Kotak Mahindra AMC.
Lower MF deployment into the stock market in this fiscal year is a result of the sluggish net inflows into equity schemes.
According to data from the Securities and Exchange Board of India (Sebi), they have only invested Rs 10,700 crore in the first four months, compared to almost Rs 70,000 crore in the four months before that.
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