Fund Folio : Net equity inflows pick up, underpinned by lower redemptions by Motilal Oswal Financial Services Ltd
Key observations
The Nifty ended higher for the fourth successive month in Jun’25 (+3.1% MoM) to close above 25k after Sep’24 (to 25,517). Notably, the index continued to remain volatile and hovered around 1,196 points before closing 766 points higher. FIIs were net buyers for the fourth consecutive month, investing USD2.4b in Jun’25. DIIs also showed healthy inflows, amounting to USD8.5b in Jun’25. FII outflows from Indian equities have reached USD7.9b in CY25YTD vs. outflows of USD0.8b in CY24. DII inflows into equities remain robust at USD42b in CY25YTD vs. USD62.9b in CY24.
The MF industry’s equity AUM (including ELSS and index funds) continued to scale a new high of INR36.6t in Jun’25 (+4.3% MoM), owing to a rise in market indices (Nifty up 3.1% MoM) and a slower pace of redemptions to INR404b (down 10.4% MoM). Consequently, net inflows increased to INR246b in Jun’25 from INR201b in May’25.
Total AUM of the MF industry scaled new highs to reach INR74.4t in Jun’25 (+3.1% MoM), primarily led by a MoM increase in AUM for equity funds (INR1,498b), other ETFs (INR253b), balanced (INR212b), and income (INR186b) funds.
Investors continued to park their money in mutual funds, with inflows and contributions in systematic investment plans (SIPs) reaching a new peak of INR272.7b in Jun’25 (up 2.2% MoM and 28.3% YoY).
A few interesting facts
* The month witnessed notable changes in the sector and stock allocation of funds. On an MoM basis, the weights of NBFCs, Retail, Consumer Durables, Healthcare, and Telecom increased, while those of Private Banks, Automobiles, Technology, Oil & Gas, Consumer, and Utilities moderated.
* Private Banks’ weight, after touching a 20-month high in Apr’25, moderated for the second straight month in Jun’25 to 17.9% (-50bp MoM, +70bp YoY).
* Technology’s weight slipped to a one-year low in Jun’25 to 8.1% (-20bp MoM; -20bp YoY).
* Telecom’s weight rose to a 59-month high in Jun’25 to 3.5% (+10bp MoM; +30bp YoY).
* Retail’s weight climbed to an all-time high in Jun’25 to 2.9% (+30bp MoM; +60bp YoY).
* Utilities continued to moderate to a 22-month low in Jun’25 to 3.8% (-10bp MoM; -70bp YoY).
* The top sectors where MF ownership vs. the BSE 200 is at least 1% higher: Healthcare (16 funds over-owned), Consumer Durables (12 funds overowned), Chemicals (11 funds over-owned), Capital Goods (9 funds over-owned), and Retail (8 funds over-owned).
* The top sectors where MF ownership vs. the BSE 200 is at least 1% lower: Consumer (18 funds under-owned), Oil & Gas (17 funds under-owned), Private Banks (16 funds under-owned), Technology (13 funds under-owned), and Utilities (11 funds under-owned).
* In terms of value increase MoM, divergent interests were visible within sectors: The top 5 stocks that witnessed the maximum rise in value were Asian Paints (+INR109.6b), Bharti Airtel (+INR83.2b), Vishal Mega Mart (+INR83.1b), Reliance Industries (+INR77.3b), and HDFC Bank (+INR76.2b).
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