Mutual Funds folio accretion picks up to 22.69 lakhs in July 2026

Mutual Funds folio accretion picks up to 22.69 lakhs in July 2026

TOTAL FOLIO ACCRETION IMPROVES FOR THIRD MONTH

Open ended funds added 22.69 lakh folios in July 2026; compared to 20.40 lakh folios in June, and 12.63 lakh folios in May 2026. However, one must look at the folio accretion in perspective and it has come down from over 50 lakh folio accretion a month in January 2026. While the fall in folio accretion can be attributed to the uncertainty in markets, the pick-up in the last 3 months is a positive signal. It seems that retail investors who were ejected out of the F&O system are now finding solace in mutual fund SIPs, which is a good trend.

While debt funds added a robust 3.17 lakh folios, active equity funds added 14.31 lakh folios in the month of July 2026. Equity and debt fund folio accretion improved over June. Hybrid funds added 3.06 lakh folios in July, while passive funds turned added a sharply lower 2.14 lakh folios. It looks like the retail euphoria over gold and silver ETFs seems to be waning. Passive folios had contracted in April 2026 and had grown marginally in May. Equity ETFs are still robust growth in retail folios. Here are the top 5 in each category in terms of folio shift significance.

ACTIVE DEBT FUND FOLIOS: LONG END FOLIO CONTRACTION CONTINUES

For the month of July 2026, active debt funds added a total of 3.17 lakh folios or 3.54% over the previous month. Here are the 5 most significant folio changes by category.

Data Source: AMFI

Out of the 16 categories of debt funds, 7 categories saw folio contraction, while 9 categories saw folio accretion. If you look at the top 5 active debt fund categories in terms of folio change in July 2026; Liquid funds, Credit Risk Funds, and Overnight Funds were positive, while the other significant folio shifts in Long Duration Funds and Gilt Funds were on the negative side. One trend is greater caution at the long end, although retail interest in credit risk is growing.

The caution at the long end can be attributed to a much higher risk of rate hikes by the RBI amid higher consumer inflation expectations. There are also concerns on debt at the long end due to the persistent geopolitical risk in the Middle East. It looks like investors are looking for alpha in debt funds through credit risk funds, which can actually cut both ways.

EQUITY FUND FOLIOS - ALPHA HUNTING DOMINATES ALLOCATION

For the month of July 2026, active equity funds added a total of 14.31 lakh folios or 0.77% growth over the previous month. Here are the 5 most significant folio changes by category.

Data Source: AMFI

Like in the case of flow trends, even folio accretion was focused on the same 2 themes of alpha hunting and diversified allocation. In the above list, flexi-cap funds, large & mid-cap funds, and multi-cap funds represent a diversification strategy across large caps, mid-caps, and small caps. However, the clearly dominant theme is alpha hunting; represented by small cap funds and mid-cap funds. Investors prefer to hunt for alpha in small cap and mid-cap funds, as large caps are more vulnerable to the geopolitical risks, which is evident from the outflows from large caps. Also, an increasing share of large cap flows is gravitating towards index ETFs.

HYBRID FUNDS – FOLIO FOCUS ON TREASURY AND ALLOCATION

For the month of July 2026, hybrid allocation funds added a total of 3.07 lakh folios or 1.17% over the previous month. Here are the 5 most significant folio changes by category.

Data Source: AMFI

If you look at the five most significant funds in terms of folio accretion, all are on the positive side. Arbitrage Funds dominated; as they also saw some of the short-term liquid folios shifting for better tax efficiency. Then there are the allocation category funds like multi asset allocation funds (MAAFs), Equity Savings Funds and Children’s Funds. MAAFs are slightly lower on the investor radar with the stagnation in gold and silver prices.

PASSIVE FUNDS WITNESS SLOWING FOLIO ACCRETION

For the month of July 2026, passive funds saw accretion of 2.14 lakh folios or 0.37% over the previous month. Here are the 4 most significant folio changes by category.

Data Source: AMFI

In the last few months, we saw passive investors pivoting away from gold and silver ETFs to equity index ETFs and global passive funds. The month of July 2026 saw folio contraction in silver ETFs and in equity index ETFs. There seems to be more of market boredom setting in, with most of the passive index products underperforming in this volatility.

The good news is that overall folio accretion continues to be healthy on a net basis. The real difference will be seen when the SIP stoppage ratio comes down sharply, as they are one of the biggest contributors to retail folios.