Large‑cap funds draw higher inflows despite small caps outperformance: Report
New Delhi, July 18
India's large‑cap funds attracted the highest inflows among segments in June even as they lagged year‑to‑date performance, a report said on Saturday.
The report from Vallum Capital said highlighted a clear divergence in investor behaviour in June as large‑cap funds attracted Rs 9,656 crore of inflows despite being the worst‑performing category this year, down 5.4 per cent year‑to‑date, primarily due to strength of SIP‑led automatic flows.
Mid‑cap funds recorded the sharpest increase in inflows at over Rs 1,336 crore, while small‑cap funds attracted Rs 4,508 crore and posted the strongest YTD return of 9.3 per cent.
The report added that healthcare remained the standout sector in 2026, delivering nearly 15 per cent year‑to‑date returns.
In an uncertain macro environment, investors continue to favour businesses with relatively predictable cash flows, including hospitals, diagnostics and pharmaceuticals. The sector also witnessed a Rs 294 crore increase in inflows during June.
Total net asset‑level inflows moderated to Rs 48,826 crore in June from Rs 56,886 crore in May, marking a decline of 14 per cent month‑on‑month.
Equity inflows strengthened to Rs 48,914 crore, up Rs 3,215 crore over May, even as returns remained modest at 1.8 per cent. Fixed Income witnessed net outflows of Rs 51,489 crore, while Money Market outflows deepened further to Rs 57,277 crore, indicating institutional liquidity continued moving out of defensive assets.
In contrast, Precious Metals attracted net inflows of Rs 8,678 crore despite delivering a negative 6.3 per cent return during the month, suggesting investors used the correction to accumulate gold rather than exit the asset class.
Real Estate gained 14.4 per cent in July, essentially erasing a year's worth of losses in 30 days.
Private banks saw a surge of Rs 802 crore in fresh inflows last month, while broader banking indices saw outflows.
Technology funds, despite being down 17.3 per cent this year, saw investors are buying in the dip.
Despite positive one-month returns across most consumption segments, the broader consumption category continued to witness outflows in June. FMCG remains among the weakest-performing themes, down 12.4 per cent year-to-date.
— IANS
Reader Comments
The healthcare sector doing well makes so much sense - post-COVID, everyone is focused on health and diagnostics. My family has been investing in pharma funds for a while now, good to see it paying off. But why are people still putting money in large caps when returns are negative? Behenchod logic kahan hai? 😅
The fact that gold attracted inflows despite negative returns shows Indians' obsession with gold hasn't died down! Chahe kuch bhi ho, gold toh lena hi hai. But honestly, maybe this dip is a good time to accumulate gold for long-term. Smart investors know when to buy the fear.
Interesting data. The divergence between large cap inflows and performance is concerning. It suggests a herd mentality rather than strategic allocation. Institutional outflows from fixed income into risk assets could be a warning sign if macro conditions worsen. The real estate bounce is shocking - erasing a year of losses in 30 days is artificial.
SIPs are the reason large caps are getting money - most auto-debits are set to large cap funds. But my mutual fund advisor told me to rebalance towards mid and small caps for better returns this year. This report confirms it! Time to review your portfolio, folks. Don't be lazy like large cap investors 😴
Private banks inflows vs broader banking outflows is the real story here. HDFC, ICICI, Kotak are eating everyone's lunch. FMCG underperformance is worrying for a consumption story economy. Maybe the buzzwords are changing - it's healthcare and diagnostics now, not toothpaste and detergent.
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