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Key observations

* The Nifty, after consolidating in May’26, managed to close in the green (+1.4% MoM to 23,866 in Jun’26). Notably, the index was extremely volatile, swinging around 1,191 points before closing 318 points higher. DII inflows were strong at USD8.7b, while FIIs recorded outflows of USD3b for the fourth consecutive month in Jun’26.

* Equity AUM of domestic MFs (including ELSS and index funds) reached a new high of INR40.7t in Jun’26 (+3.2% MoM), owing to a rise in market indices (Nifty up 1.4% MoM) and an increase in sales of equity schemes (up 17.5% MoM to INR780b). The pace of redemptions picked up to INR491b (up 15.5% MoM). Consequently, net inflows climbed in Jun’26 to INR289b from INR238b in May’26.

* Total AUM of the MF industry increased marginally by 0.8% MoM to INR82.2t in Jun’26, primarily led by a MoM increase in AUM of equity (INR1,246b), balanced (INR206b), other ETFs (INR148b), and arbitrage (INR75b) funds. Conversely, the AUM of liquid funds declined INR454b, income funds decreased INR425b, and gold ETF funds fell INR144b MoM.

* Investors continued to park their money in mutual funds. Inflows and contributions in systematic investment plans (SIPs) stood at INR317.8b in Jun’26 (up 2.7% MoM and +16.5% YoY)

A few interesting facts

* The month witnessed noteworthy changes in the sector and stock allocation of funds. On a MoM basis, the weights of Private Banks, Healthcare, NBFC - Lending, Automobiles, Retail, E-Commerce, Real Estate, Consumer Durables, and Logistics increased, while those of Technology, Oil & Gas, Utilities, Metals, Consumer, Telecom, Insurance, NBFC – Non-Lending, and Cement moderated.

* Private Banks’ weight saw a rise in weight for Jun’26 to 17.9% (+60bp MoM; +10bp YoY)

* Healthcare weight climbed for the second consecutive month to a 66-month high in Jun’26 to 8% (+20bp MoM; +60bp YoY)

* Technology’s weight slipped to an all-time low in Jun’26 to 5.9% (-70bp MoM; -240bp YoY)

* Oil & Gas’ weight continued to slip to a new low in Jun’26 to 4.9% (-40bp MoM; -120bp YoY)

* The top sectors where MF ownership vs. the BSE 200 was at least 1% higher were NBFC – Non-Lending (15 funds over-owned), Healthcare (14 funds over-owned), Capital Goods (9 funds over-owned), E-Commerce (9 funds over-owned), and Chemicals (9 funds over-owned).

* The top sectors where MF ownership vs. the BSE 200 was at least 1% lower were Oil & Gas (20 funds under-owned), Private Banks (15 funds underowned), Consumer (14 funds under-owned), PSU Banks (13 funds under-owned), and Utilities (12 funds under-owned).

* In terms of value change MoM, the maximum increase was visible in the BFSI stocks: The top 10 stocks that witnessed the maximum rise in value were HDFC Bank, ICICI Bank, Bajaj Finance, Interglobe Aviation, Eternal, SBI, Adani Enterprises, JSW Infra, Axis Bank, and Maruti Suzuki. Conversely, the stocks that witnessed the maximum MoM decline in value were Infosys, NTPC, TCS, Hindalco, Reliance Industries, Tata Steel, Persistent Systems, HCL Tech, BSE, and ONGC.

Net equity inflows pick up in Jun’26; after touching a 12-month low in May’26

AUM: Up 0.8% MoM to INR82.2t in Jun’26; equity inflows accelerate

* Total AUM of the MF industry increased marginally by 0.8% MoM to INR82.2t in Jun’26, primarily led by a MoM increase in AUM of equity (INR1,246b), balanced (INR206b), other ETFs (INR148b), and arbitrage (INR75b) funds. Conversely, AUM of liquid funds declined INR454b, income funds decreased INR425b, and gold ETF funds fell INR144b MoM.

* Equity AUM of domestic MFs (including ELSS and index funds) rose 3.2% MoM to INR40.7t in Jun’26, owing to a rise in market indices (Nifty up 1.4% MoM) and an increase in sales of equity schemes (up 17.5% MoM to INR780b). The pace of redemptions picked up to INR491b (up 15.5% MoM). Consequently, net inflows climbed in Jun’26 to INR289b from INR238b in May’26.

Sector-wise weightage: MoM increase visible in Private Banks and Healthcare

* In Jun’26, MFs showed interest in Private Banks, Healthcare, NBFC - Lending, Automobiles, Retail, E-Commerce, Real Estate, Consumer Durables, and Logistics, leading to a MoM rise in their weights. Conversely, Technology, Oil & Gas, Utilities, Metals, Consumer, Telecom, Insurance, NBFC - Non Lending, and Cement saw a MoM moderation in weights

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