August MF data: SIP inflows rise to record ₹32,297 crore; new registrations climb to 66.39 lakh

The mutual fund industry recorded net inflows of ₹41,353.60 crore in August, sharply lower than the ₹2.35 lakh crore recorded in July, largely due to a reversal in debt fund flows. However, retail participation remained strong, with monthly Systematic Investment Plan (SIP) contributions rising to a record ₹32,297 crore from ₹31,961 crore in July 2026.

New SIP registrations increased to 66.39 lakh in August from 61.44 lakh in July, while SIP contributions rose about 14% from ₹28,265 crore in August 2025. Five-month SIP collections crossed ₹1.58 lakh crore for FY27.

Debt funds recorded a net outflow of ₹8,127.32 crore in August, compared with a net inflow of ₹1.87 lakh crore in July. Debt fund inflows had surged in July as corporate and institutional investors returned after moving money out in June to meet advance tax payments.

In contrast, equity mutual funds saw inflows of ₹29,328.62 crore, up nearly 19% from ₹24,697.39 crore in July.

Equity flows remain strong

Equity-oriented mutual fund categories saw a healthy pick-up in August despite subdued headline equity markets.

“The improvement is encouraging, particularly given that headline equity markets remained somewhat subdued during the month,” said Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India.

He said sustained flows reflect the resilience of domestic investors and their willingness to look beyond near-term volatility. SIP investing, rising awareness of mutual funds as a long-term wealth-creation vehicle and confidence in India’s longer-term economic and corporate earnings prospects continue to support equity flows.

Investor sentiment also received support from improving corporate earnings and the return of foreign investors, with FPIs remaining net buyers for the second consecutive month in August.

Small, mid-cap funds lead flows

Small-cap funds attracted ₹7,973 crore in August, while mid-cap funds garnered ₹6,989 crore and flexi-cap funds ₹5,059 crore. In contrast, large-cap funds saw an outflow of ₹1,147 crore and ELSS funds recorded an outflow of ₹1,078 crore.

According to Viraj Gandhi, CEO, SAMCO Mutual Fund, the category-wise flows point to a shift in investor preferences.

Small-cap inflows were well above the 12-month average monthly collection of ₹4,946 crore, while mid-cap inflows were also strong at ₹6,989 crore. Large-cap funds, meanwhile, reversed from an average monthly inflow of ₹1,176 crore over the past 12 months to an outflow in August. Flexi-cap inflows of ₹5,059 crore were also below their 12-month average of ₹7,642 crore.

The recent performance gap between market-cap segments could partly explain the rotation. For the year ended August 2026, the Nifty Midcap 150 gained around 14%, while the Nifty Smallcap 250 rose about 12%. The Nifty 100, in comparison, gained around 2%.

Debt outflows mask broader strength

Nitin Agrawal, CEO, Mutual Funds, InCred Money, said the sharp reversal in debt flows was largely driven by institutional cash-management categories. Overnight funds saw outflows as institutional cash cycled out, while liquid funds recorded a modest inflow of ₹19,934 crore.

Gold ETF inflows accelerated to ₹2,597 crore in August, while silver ETFs attracted ₹1,271 crore. Agrawal said geopolitical and global macro uncertainty continued to support gold as a portfolio hedge, while rising silver ETF flows reflected growing retail interest in the commodity alongside gold.

“August delivers the strongest equity inflow reading of the current calendar year. Every major active equity category is positive. AUM is at a new all-time high. Gold and silver ETFs are attracting meaningful capital,” Agrawal said. “The Indian mutual fund industry in August 2026 is not just large; it is growing with quality and breadth.”

Saugata Chatterjee, President and Deputy CEO, Nippon India Mutual Fund, said continued growth in industry folios, record SIP contributions and a moderating stoppage ratio point to greater discipline among Indian investors.

He said the preference for small- and mid-cap funds reflects investors’ desire to participate in the broader opportunity across corporate India, while interest in gold ETFs and multi-asset funds points to greater focus on diversification amid global uncertainty.

Flows into liquid, money-market and ultra-short-duration categories, meanwhile, suggest investors remain selective amid volatility, with a preference for the shorter end of the yield curve and lower duration risk.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)