Mutual fund investment: Equity mutual funds continued to attract strong investor interest in August 2026, with net inflows into open-ended equity schemes rising significantly from the previous month. Small-cap and mid-cap funds remained the preferred investment choices, while large-cap and tax-saving ELSS schemes continued to see withdrawals.
According to data released by the Association of Mutual Funds in India (AMFI), equity-oriented schemes received Rs 29,328.62 crore in August, compared with Rs 24,697.39 crore in July.
At the same time, the industry’s overall asset base increased despite a sharp fall in total monthly net inflows, largely because of weaker flows into debt schemes.
Equity Mutual Fund Inflows Rise in August
Investors continued to favour equity mutual funds during the month, with August inflows showing a strong improvement over July.
The biggest share of the money went towards small-cap and mid-cap schemes. Small-cap funds remained at the top of the equity category, attracting Rs 7,973.33 crore in August, compared with Rs 7,767.50 crore in July.
Mid-cap funds also recorded healthy demand. Their net inflows increased to Rs 6,989.40 crore, up from Rs 6,192.31 crore in the previous month.
Small-Cap and Mid-Cap Funds Remain Investor Favourites
The continued inflows into small- and mid-cap funds indicate that investors remained interested in diversified exposure to smaller and medium-sized companies.
While small-cap schemes recorded the highest inflows among equity categories, mid-cap funds posted a month-on-month increase of nearly 13%.
This trend was also visible across several other diversified equity fund categories.
Flexi-Cap Funds
Flexi-cap schemes received Rs 5,059.42 crore in August, compared with Rs 4,709.08 crore in July.
Large-and-Mid-Cap Funds
Inflows into large-and-mid-cap funds increased to Rs 3,872.79 crore, from Rs 3,425.34 crore a month earlier.
Multi-Cap Funds
Multi-cap funds also attracted more money, with net inflows rising to Rs 3,732.77 crore from Rs 3,227.29 crore in July.
Large-Cap Mutual Funds Continue to See Outflows
Large-cap funds followed a different trend from most other equity categories.
The segment recorded net withdrawals of Rs 1,147.36 crore in August, marking the second consecutive month of outflows.
However, the pace of withdrawals moderated compared with July, when investors pulled out Rs 1,321.69 crore from large-cap schemes.
ELSS Funds Remain Under Pressure
Tax-saving Equity Linked Savings Scheme (ELSS) funds also remained in negative territory.
Investors withdrew Rs 1,078.32 crore from ELSS schemes in August, compared with an outflow of Rs 959.13 crore in July.
This means withdrawals from the tax-saving category increased during the month despite the broader rise in equity mutual fund investments.
SIP Investments Remain Strong
Systematic Investment Plan (SIP) contributions continued to remain at elevated levels in August.
SIP inflows stood at Rs 32,297 crore in August 2026, compared with Rs 32,961 crore in July.
The figures show that monthly SIP contributions remained above the Rs 32,000-crore mark, highlighting continued participation by investors through systematic investment routes.
Debt Fund Outflows Offset Equity Gains
Although equity mutual funds attracted more money, the overall mutual fund industry’s monthly net inflow declined sharply because of a major reversal in debt fund flows.
Open-ended debt schemes registered a net outflow of Rs 8,127.32 crore in August, compared with a massive inflow of Rs 1,87,511.32 crore in July.
The significant change in debt fund flows had a substantial impact on the industry’s overall monthly numbers.
Overnight Funds See Heavy Withdrawals
Overnight funds were among the categories that recorded a major reversal.
The segment witnessed a net outflow of Rs 30,654.25 crore in August, compared with an inflow of Rs 40,412.55 crore in July.
This sharp change contributed significantly to the decline in overall debt fund flows.
Liquid Fund Inflows Also Moderate
Liquid funds continued to attract investments in August, but the amount was considerably lower than the previous month.
Inflows into liquid funds dropped to Rs 19,934.29 crore, compared with Rs 1,19,065.85 crore in July.
Money-market funds also saw their inflows decline. The category attracted Rs 11,734.71 crore in August, down from Rs 21,180.23 crore in July.
Total Mutual Fund Inflows Fall in August
The sharp reversal in debt schemes more than offset the stronger performance of equity funds.
As a result, the mutual fund industry’s total net inflow declined to Rs 41,353.60 crore in August, compared with Rs 2,35,902.39 crore in July.
Despite the lower monthly inflow, the industry’s overall asset base continued to expand.
Mutual Fund AUM Crosses Rs 87 Lakh Crore
Total mutual fund assets under management (AUM) increased to approximately Rs 87.08 lakh crore at the end of August, compared with Rs 85.76 lakh crore at the end of July.
The rise in AUM indicates that the industry’s overall asset base remained strong despite the significant month-on-month fall in net inflows.
Gold ETFs Attract More Investment
Gold exchange-traded funds (Gold ETFs) emerged as another strong-performing category during August.
Net investments in Gold ETFs increased to Rs 2,596.70 crore, compared with Rs 1,558.75 crore in July.
The higher inflows indicate growing investor demand for gold-linked investment products even as some traditional mutual fund categories experienced weaker flows.
Mutual Fund Investment Trend in August 2026
The August data presents a mixed picture for the Indian mutual fund industry. Equity mutual funds continued to see strong demand, particularly small-cap, mid-cap, flexi-cap and multi-cap schemes.
At the same time, large-cap and ELSS funds remained under pressure, while debt schemes experienced a significant reversal in flows.
Gold ETFs also gained popularity during the month, and the industry’s total AUM continued to rise, reaching around Rs 87.08 lakh crore.
Overall, August highlighted continued investor participation in equity and gold-oriented products, even as changing debt-fund flows caused the industry’s total monthly inflows to fall sharply from July.