MFs step up equity buying in August with Rs 70,500 Crore, 2nd highest on record

Mumbai, Sep 5 Mutual funds sharply increased their investments in equities in August, with net purchases soaring to Rs 70,500 crore.

This marks the second-highest monthly tally ever, after October 2024, when equity buying had touched a record Rs 90,770 crore.

The strong deployment follows July’s robust figure of Rs 42,702 crore and signals sustained momentum in secondary market purchases by fund managers.

Industry experts said the surge reflects both healthy inflows and active positioning in a volatile market environment.

Meanwhile, India’s mutual fund industry has been expanding rapidly, with total assets under management (AUM) standing at Rs 74.40 lakh crore, according to a recent report by Motilal Oswal Mutual Fund.

Equity funds continue to dominate, commanding nearly 60 per cent of overall assets.

The report also highlighted the growing role of passive funds, which now account for about 17 per cent of the industry’s total AUM.

Investors are increasingly drawn to passive strategies for their cost efficiency, transparency, and alignment with market benchmarks.

In the quarter ending June, mutual funds saw estimated net inflows of Rs 3.98 lakh crore, largely led by debt funds at Rs 2.39 lakh crore, while equities contributed Rs 1.33 lakh crore.

Broad-based equity funds, particularly Flexi Cap, Small Cap and Mid Cap categories, remained popular among active strategies, while passive large-cap funds attracted steady allocations.

Analysts noted that the sharp rise in August’s equity investments underscores fund managers’ confidence in India’s market fundamentals despite global uncertainties.

With equity allocations hitting historic highs and passive investing steadily gaining ground, the industry is expected to remain a key driver of domestic market liquidity.

Another report by ICRA Analytics last month said that the net AUM of equity mutual funds surged by 335.31 per cent at Rs 33.32 lakh crore in July, up from Rs 7.65 lakh crore in July 2020.

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