Equity mutual funds attracted ₹29,329 crore in August, marking the highest net inflow in the last four months. Despite overall market volatility, investors continued to favor small and mid-cap funds.
According to data published by the Association of Mutual Funds in India (AMFI) on Thursday, this inflow exceeded the ₹24,697 crore registered in July by almost 19 percent. Retail participation through Systematic Investment Plans (SIPs) also remained strong, with monthly contributions in August reaching a record ₹32,297 crore, up from ₹31,961 crore in July.
SIP contributions were about 14 percent higher than the ₹28,265 crore collected in August 2025. After the latest contribution, cumulative SIP inflows for the first five months of the current fiscal year amounted to approximately 1.6 lakh crore. Saugata Chatterjee, President and Deputy CEO of Nippon India Mutual Fund, noted that 'record SIP contributions combined with a moderate stopping ratio demonstrate growing discipline among Indian investors.'
However, the net inflow across the mutual fund industry as a whole sharply declined to ₹41,353 crore in August compared to ₹2.36 lakh crore in July. This was mainly due to outflows from long-term schemes. Debt schemes recorded a net outflow of ₹8,127 crore in August, whereas they attracted ₹1.88 lakh crore in July.
Despite the slowdown in net inflow, Assets Under Management (AUM) in the mutual fund industry grew by 1.5 percent, reaching approximately ₹87.08 lakh crore by the end of August compared to ₹85.76 lakh crore at the end of July. Equity-oriented schemes showed a net inflow of ₹29,328.62 crore in August, the highest figure since April, when they attracted ₹38,440 crore.
Inflows into equity funds stood at ₹28,973 crore in June and ₹22,908 crore in May. Among equity categories, small-cap funds continued to attract the largest inflow at ₹7,973 crore in August, followed by mid-cap funds with ₹6,989 crore and flexi-cap funds with ₹5,059 crore. Conversely, large-cap funds recorded a net outflow of ₹1,147 crore for the month.
The latest inflow data indicates sustained high investor interest in mid and small-cap funds, as these two categories together attracted nearly ₹15,000 crore. Santosh Joseph, CEO of Germinate Investor Services, stated: 'Since the market bottom in March, mid and small companies have led the rally, while large companies have lagged. Investors have clearly participated in this trend, with inflows into mid and small-cap funds remaining strong over the last two to three months.'
Gaurav Goyal, Business Director at Canara Robeco Asset Management Company Ltd, noted that strong inflows into equities and record SIP contributions indicate that investors are increasingly staying invested across market cycles and focusing on building long-term capital.
Twenty-six schemes were launched in August, attracting a total of ₹7,110 crore, reported Venkat Chalasani, Executive Director of AMFI. Regarding debt instruments, funds recorded a net outflow of ₹8,127 crore in August, reflecting short-term liquidity needs and portfolio rebalancing, according to Rohit Sarin, Co-founder of Client Associates.
Within debt schemes, the largest net outflow was recorded by 'overnight' funds at ₹30,654 crore, followed by short-term funds with an outflow of ₹4,259 crore and corporate bond funds with an outflow of ₹3,190 crore. Gold Exchange Traded Funds (ETFs) also continued to attract investor interest, recording a net inflow of ₹2,597 crore in August, significantly higher than ₹1,559 crore in July. Silver ETFs, meanwhile, showed a net inflow of ₹1,271 crore during the month.