Inflow in equity mutual fund hit 3-month high at Rs 8,637 cr in June

New Delhi: Driven by buoyant SIP flows, equity mutual funds attracted Rs 8,637 crore in June, making it the highest net inflow in three months, amid a rally in the stock market.

This was way higher than Rs 3,240 crore inflow seen in May and Rs 6,480 crore in April. Before that, the net inflow was Rs 20,534 crore in March, data released by the Association of Mutual Funds in India (Amfi) showed on Monday.

"June net numbers were a tad higher than May. Some profit booking at higher levels to maintain asset allocation is not ruled out but investors continue to keep investing through SIPs (Systematic Investment Plans) and STPs (Systematic Transfer Plans)," Manish Mehta, National Head and Sales, Marketing & Digital Business at Kotak Mahindra Asset Management Company, said.

Inflow through SIP was at Rs 14,734 crore last month as compared to Rs 14,749 crore in May. This is the fourth consecutive month of SIP flows coming in above the Rs 14,000 crore mark.

Investors continued their maximum allocation to small-cap funds at Rs 5,472 crore, followed by value funds (Rs 2,239 crore) and mid-cap funds (Rs 1,749 crore).

"With large-cap stocks underperforming in H1 CY2023 due to the notable valuation difference with the broader market-cap stocks, it was the right move by investors," Gopal Kavalireddi, Vice President - Research at FYERS, said.

Apart from equities, hybrid schemes saw inflow of Rs 4,611 crore, with a large part of flow into arbitrage funds at Rs 3,366 crore.

Overall, the 43-player mutual fund industry saw a withdrawal of Rs 2,022 crore, on contributions from debt-oriented schemes. This comes following a net investment of Rs 57,420 crore in the preceding month.

"This steep fall was on expected lines with June being the quarter-ending month, impacted by advance tax payments and other liquidity requirements by companies and individuals," Kavalireddi said.

However, average assets under management of the industry rose to a record high of Rs 44.8 lakh crore at June-end from Rs 42.9 lakh crore at the end of May.

Kavalireddi attributed the growth in the asset base to buoyant stock market, which was boosted by a strong flow from Foreign Portfolio Investors (FPIs) in June.

Debt funds saw a net outflow of Rs 14,135 crore in June as compared to an inflow of Rs 45,959 crore in the preceding month.