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Below the Perspective on AMFI Data by Mr. Vineet Jain, Senior Director, CareEdge Ratings

“Equity mutual fund inflows rose 19% month-on-month (m-o-m) to Rs 29,329 crore in August 2026 from Rs 24,697 crore in July, reversing the fall of 14.8% seen in the prior month. Investors continued to favour small and midcap categories as small-cap funds pulled in Rs 7,973 crore, though the pace of growth moderated to just 2.6% m-o-m after July's sharp jump of 38.7%. Mid-cap and large & mid-cap funds saw healthy gains, up 13% each. Large-cap funds continued to see outflows, though the quantum narrowed to Rs 1,147 crore from Rs 1,322 crore in July, suggesting the pullback from large-cap bets may be stabilising. Flexi Cap continues to hold its position as the largest actively managed equity category, with AuM rising further to around Rs 6.11 lakh crore from Rs 6 lakh crore last month, which tells us investors still value the flexibility of unconstrained mandates, while multi-cap inflows rose 16%. On the debt side, we saw a sharp swing from July's blockbuster Rs 1.88 lakh crore inflow to a modest net outflow of Rs 8,127 crore in August. The outflow was driven largely by overnight fund redemptions of Rs 30,654 crore. That said, liquid and money market funds held up in positive territory at Rs 19,934 crore and Rs 11,734 crore, respectively, albeit at a slower pace, and widening outflows from corporate bond, banking & PSU, and gilt funds point to investors staying cautious on duration for now. Gold ETFs had a strong month, with inflows up nearly 67% to Rs 2,596.70 crore and now positive for three consecutive months, tracking the rise in domestic gold prices. That clearly signals investors are using gold as a hedge in the current environment. Passive equity products also continued to see healthy traction, with equity ETFs and index funds together pulling in over Rs 9,600 crore even as debt ETFs and debt index funds saw outflows of Rs 2,555 crore.

Hybrid mutual funds saw net inflows of Rs 10,045 crore in August, moderately down 12.6% from Rs 11,491 crore in July. Arbitrage funds, still the largest contributor within the category, saw inflows nearly halved to Rs 3,789 crore from July's inflows of Rs 6,502 crore.

Overall industry AuM rose 1.5% sequentially to Rs 87.08 lakh crore in August from Rs 85.76 lakh crore in July. In August, collections under new issuances expanded to Rs 7,110 crore across 26 funds compared to a muted Rs 2,022 crore mobilised across 25 new funds in July. In August, SBI Balanced Hybrid Fund NFO was the highest contributor at Rs 1,818 crore. The August data reflects changes in AMFI’s classification of several fund categories, including separate reporting for ETFs, index funds, overseas funds and life cycle funds. Consequently, some August categories are not directly comparable with the corresponding July groupings.”

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