DEBT FUND REDEMPTIONS OFFSET INFLOWS IN JUNE 2026

DEBT FUND REDEMPTIONS OFFSET INFLOWS IN JUNE 2026

MUTUAL FUND FLOWS JUNE 2026 – RAPID FIRE

In June 2026, open-ended mutual funds saw net outflows of ₹(50,142) Crore across categories. Here is a quick look at the key flow narratives.

Debt funds saw net outflows of ₹(1,09,054) Crore. Apart from the quarter end advance tax pressures, the fears of RBI raising rates to combat inflation, also impacted flows.

Equity Fund inflows were higher 26.5% MOM at ₹28,973 Crore. Flows were led by mid-caps, small caps and flexi caps; as investor went about alpha hunting.

Hybrid funds saw net inflows of ₹13,214 Crore, largely due to positive flows into Arbitrage Funds, MAAFs, and BAFs; while other categories were relatively modest.

Passive funds rebounded with net inflows of just ₹16,724 Crore for June 2026, as equity index ETFs, Gold ETFs, and Silver ETFs saw sharp net inflows for the month.

The NFOs were tepid in June 2026 to ₹460 Crore, while gross SIP flows in June 2026 made a record for FY27 at ₹31,781 Crore.

Let us turn to flow significance as a share of net AUM.

MF FLOW SIGNIFICANCE ON NET AUM SIZE – MACRO PICTURE

When it comes to mutual fund flows; two things matter. The size of the flows and whether the swing flows were on the positive or negative side? Here is a quick macro picture.

Data Source: AMFI (# - Only open-ended funds)

Debt fund flows were on the negative side due to advance tax payouts, and large enough to influence the entire flow picture. However, flows into active equity funds, hybrid funds, and passive funds saw a recovery amidst reducing geopolitical risk. Overall picture was negative.

ACTIVE DEBT FUNDS: ADVANCE TAX PAYMENTS TRIGGER SELLING

In the case of debt funds in June 2026, 14 out of the 16 categories of debt funds saw net outflows. Outflows were dominant at the short end of the yield curve as corporates and institutions redeemed treasury investments to pay advance taxes for the quarter.

Data Source: AMFI

As can be seen in the above table, the most significant inflows as share of AUM were all on the negative side (Low Duration, Overnight, Ultra Short Duration, Medium to Long Duration, and Liquid Funds). Only Medium to Long Duration funds were at the longer end of the yield curve, with rest at the short end. RBI rate action uncertainty is an overhang for debt funds.

ACTIVE EQUITY FUNDS: FLOWS IMPROVE, BUT THEMES REMAIN SAME

In the case of equity funds in June 2026, 9 out of the 11 fund categories saw net inflows while ELSS and Dividend Yield Funds, once again, saw net outflows. In terms of the 5 most significant flow categories, all were in the positive.

Data Source: AMFI

A cursory look at the 5 most significant in terms of Flow/AUM shows a mix of alpha hunting and broad portfolio allocation to reduce risk. Flexi cap funds, large & mid-cap funds, and multi-cap funds are all about diversification across cap classes. On the other hand; Small Cap Funds and Mid-Cap funds are about generating alpha by taking on higher risk. Flows improved overall for June 2026, but the flow intensity themes continue to remain the same.

HYBRID ALLOCATION FUNDS: FLOWS INTO MAAF AND ARBITRAGE FUNDS

In the case of hybrid funds (including solutions funds) in June 2026; out of the 8 hybrid categories, 7 saw positive flows and only Equity Savings Funds witnessed outflows. Overall, 4 out of 5 most significant flow categories were on the positive side.

Data Source: AMFI

If you look at the five categories of hybrid funds with the most significant flow to AUM ratio, the broad theme remains focused on MAAFs and Arbitrage Funds. Despite the correction in gold and silver prices, MAAFs continued to attract interest. Arbitrage funds saw a shift from liquid funds for parking; but the remaining categories of hybrids saw tepid flows in June.

PASSIVE FUNDS: PRECIOUS METALS BACK WITH A BANG

In the case of passive funds in June 2026; 3 out of the 4 fund categories saw net inflows. In terms of the most significant flow categories, here is the list.

Data Source: AMFI

The action this month was back in gold ETFs, equity ETFs, and silver ETFs, which accounted for bulk of the inflows in June. The index ETF buying was led by silver ETFs and equity index ETFs. Amid the sharp fall in gold and silver prices from peak levels, substantial retail interest appears to be returning to gold and silver ETFs.

Overall, debt funds have seen concerns at the short end and the long end. On the equity flow front, the focus continues to be on alpha hunting and allocation. However, overall flows have remained negative for the second straight month in a row. That is a concern!