New Delhi: Indian equity mutual funds maintained their momentum in September, attracting robust investments despite a declining stock market and foreign capital outflows. Domestic investors utilized systematic investment plans (SIPs) and other regular allocations to provide steady market support during a volatile period.
Data published by the Association of Mutual Funds in India on Monday revealed that net inflows into equity mutual funds expanded 31 percent from August to reach Rs 38,307 crore in September, hitting a five-month peak. This milestone extends a historic streak of net inflows into equity mutual funds to 67 consecutive months, demonstrating how domestic capital continues to shield Indian equities from international uncertainties.
Small-cap and mid-cap mutual funds experienced record demand during the month despite broader market corrections. Small-cap schemes attracted Rs 9,039 crore, representing a 13 percent increase, while mid-cap portfolios pulled in Rs 7,845 crore, up 12 percent. Flexi-cap funds also maintained strong popularity, gathering Rs 6,702 crore over the course of the month.
Industry experts noted that the September data illustrates enduring investor confidence in equities despite conditions requiring careful risk management. Commentators pointed out that diversified participation across market segments indicates robust foundational interest from retail participants.
Meanwhile, contributions through systematic investment plans climbed 0.6 percent from the prior month to touch a new high of Rs 32,490 crore in September. These consistent inflows successfully mitigated foreign portfolio investor withdrawals totaling $3.75 billion during the same period.
AMFI leadership highlighted that regular domestic allocations, led by SIPs, continued to reinforce the marketplace in the face of rising inflation metrics, elevated crude oil costs, and climbing US bond yields. Market analysts characterized the ongoing surge of systematic investment funding as a structural transformation within the domestic financial ecosystem that is unlikely to taper off in the near term.
While the Nifty 50 index declined 6.1 percent in September and faced a roughly 14.4 percent drop for the year up to that point—trailing international counterparts—domestic mutual fund participation cushioned the broader ecosystem. Precious metal funds also captured significant capital, as gold exchange-traded funds saw inflows surge 71 percent to Rs 4,451 crore, and silver exchange-traded funds collected Rs 1,974 crore. Equity exchange-traded funds similarly secured strong inflows totaling Rs 9,960 crore.
In contrast to the gains in equities and precious metals, debt mutual funds registered net outflows amounting to Rs 1.83 lakh crore in September, primarily stemming from liquid and money market products. Market participants attributed these debt movements to institutional liquidity adjustments and periodic portfolio rebalancing, advising investors to maintain disciplined asset allocation aligned with long-term financial objectives rather than responding to short-term market fluctuations.