Inflows into equity mutual funds increase more than doubled last month to ₹8,637 crore against ₹3,240 crore in May with investors betting big on high-risk small cap funds.

Investment in small cap funds hit a new high of ₹5,472 crore in June against ₹3,282 crore in May, even as large-cap and focused funds registered a net outflow of ₹2,050 crore (-1,362 crore) and ₹1,018 crore (-₹944 crore) as investors booked profit, according to the Association of Mutual Funds in India data. released on Monday

Equity linked saving scheme and flexi-cap funds also recorded net outflow of ₹475 crore (-₹505 crore) and ₹17 crore (-₹368 crore), it said.

Interestingly, large mutual fund houses have curtailed investment into small cap funds due to difficulty in deployment of fresh fund flows in the market.

NS Venkatesh, CEO, AMFI said investors are putting money in small-cap after being fully aware of the risk involved and many of them would have booked profit from large cap and focused funds to invest in small-cap funds for higher returns as small-cap index have crashed 60 per cent.

SIP accounts

The SIP accounts that were closed hit an all-time high at 15.26 lakh while the new accounts opened was also at a new high of 27.78 lakh. SIP inflows dipped marginally to ₹14,734 crore last month from ₹14,748 crore in May, it added.

Melvyn Santarita, Analyst, Morningstar India said a good amount of the net inflows in the equity asset class could be attributed to the six newly launched funds which mopped up ₹3,038 crore last month.

Investors have been consistently investing in both mid- and small-cap categories in last couple of years and these categories saw net outflow in 2021, he said.

Hybrid category

Among hybrid category, arbitrage and multi-asset allocation funds attracted investment of ₹3,366 crore (₹6,640 crore) and ₹1,323 crore (₹738 crore)

Debt funds registered a net outflow of ₹14,135 crore against inflow of ₹45,959 crore in May with liquid and floater funds recording an outflow of ₹18,910 crore (inflow of ₹45,234 crore) and ₹2,378 crore (outflow of ₹2,378 crore) as corporates pulled out money to meet their quarterly statutory payments.

Overall, asset under management of the MF industry hit a new high of ₹4,4.39-lakh crore (₹43.20-lakh crore) even as there was a net outflow of ₹2,022 crore in May.

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