Key trends from July AMFI data: Small-cap funds get highest inflows among equities, investors flock to gold ETFs and more

The small cap funds noticed a decrease in inflows. It recorded Rs 4,171 crore inflow in July versus Rs 5,472 crore in June. However, it received the highest inflows among all equity categories. The midcap fund inflow was recorded at Rs 1,623 crore.

"During July 2023, Nifty 50 gained 1.4 percent, the Nifty Small-cap 100 index was up by 6.4 percent, and the Nifty Midcap 100 index increased by 5.5 percent. This clearly demonstrates where the markets’ action is concentrated," said Viraj Gandhi, CEO at SAMCO MF.

Large cap funds saw the highest outflow of Rs 1,880 crore. This category has been witnessing outflows since the last three months. As per Srivastava, large cap segment has delivered good performance in the recent times providing investors a good profit booking opportunity.

Debt-oriented schemes in the mutual fund sector received a net inflow of Rs 61,400.08 crore during the month of July. Among the categories that faced net outflows were overnight funds, short duration funds, medium duration funds, credit risk funds, banking and PSU funds, and gilt funds with 10-year constant durations. Overnight funds stood out as the category with the highest net outflows, amounting to Rs 10,746.83 crore in July.

On the other hand, categories like liquid funds registered substantial inflows, with Rs 51,938.41 crore pouring in during July, a remarkable turnaround from the Rs 28,545.45 crore outflow in June.

According to the latest data released by Association of Mutual Funds in India (AMFI), SIP inflows reached a record of Rs 15,242.7 crore during the reviewed month. The number of SIP accounts stood at 6.8 crore for July 2023 compared to 6.65 crore in June 2023.

One of the key highlights of the AMFI data is the growth in the Assets Under Management (AUM) attributed to mutual fund SIPs. The AUM, which stood at Rs 7.93 lakh crore in the previous month, saw a substantial increase to Rs 8.32 lakh crore in July.

Gold ETF continue to attract flows, as it received a net inflow of Rs 456.15 crores, which is sharply higher than the net inflow of Rs 70.32 cr in June.

"Pertinent risks still engulf developed economies. With continued hike in interest rate in the US, inflation still higher than expectation, and growth rate slowing down, the appeal of gold as a safe haven and hedge against inflation is expected to continue. Moreover, gold prices in the recent times have come-off from its all-time high levels, thereby providing some buying opportunity, particularly after a sharp rally it witnessed since March this year," Srivastava said.