Price moves play subdued role in MF AUM shift; amid global uncertainty

PRICE MOVES IN AUM SHIFT – THE MACRO PICTURE

In the month of July 2026, price moves played a smaller role due to geopolitics induced price volatility. While debt flows were robust other categories like active equity funds, hybrid funds, and passive funds saw slowing of flows in July 2026. Withing the equity funds space, the focus was more on alpha hunting and less on asset allocation.

At a macro level, AUM of open-ended funds increased by 4.13% to ₹85.59 trillion. In rupee terms, the total AUM of open-ended funds increased by 3.54 trillion. This includes ₹1.17 trillion as price accretion, and ₹2.37 trillion by way of net inflows from mutual funds in July 2026. Inflows in July were largely dominated by the return of debt funds.

Data Source: AMFI (absolute numbers are ₹ in crore)

WHAT TRIGGERED MUTUAL FUND AUM SHIFT IN JUL-26

• In the case of debt funds, AUM increase of ₹1.96 trillion was triggered by ₹1.88 trillion of net inflows into debt funds; and ₹0.08 trillion of price accretion.

• Equity funds had high price dominance at 75.9%. While prices remained volatile, the flows were also relatively lower than last month, leading to same price dominance.

• In case of Hybrid funds, price dominance was modest at 52.5%, but that was more due tepid flows into categories like BAFs, Equity Savings, and Conservative Hybrids.

• In the case of Passive funds, price dominance was modest at 59.1%, largely due to the impact of the global tech and AI stock sell-off on the major global indices.

• At a macro level, the overall price accretion was dominated by equity funds, passive funds, and hybrid funds; while debt was cautious due to rate hike expectations.

EQUITY AUM SHIFT: JULY STORY STILL DOMINATED BY PRICE ACCRETION

For July 2026, Active Equity Funds saw positive flows of ₹24,697 crore, a full -14.8% lower than in June. However, the real story was more nuanced.

• Active Equity funds saw net AUM accretion of ₹1,02,462 crore. This was triggered by price accretion of ₹77,764 crore, assisted by net inflows into equity funds of ₹24,697 crore. Price accretion was lower than last month due to global uncertainty.

• Within equity funds, Dividend Yield Funds, ELSS Funds, Large Cap Funds, and Value Funds saw price dominance of over 100%. In all 4 cases, flows were in the negative but price moves were robust. It was more about tepid flows for these 4 categories.

• Most of the popular equity fund categories like mid-cap funds, small cap funds, and multi-cap funds had price dominance of less than 65%. That is more because the flows have been very robust and that has underplayed the price impact.

• Once again, the flows have been the most robust in the month of July 2026 in 2 themes viz. alpha hunting and allocation. Interestingly, in July 2026, the alpha theme of small caps and mid-caps has dominated the diversification bets like flexi-caps.

• The bottom 4 fund categories in the above list accounted for 83.5% of the total flows but just 33.0% of the price accretion. As a result, these 4 categories (Small Caps, Mid-Caps, Multi-Caps, and Large & Mid-Caps) accounted for just 45.1% of the overall AUM shift in July 2026.

Large caps are giving way to passive plays, and sector plays are off the table. July 2026 has marked alpha hunting clearly dominating market cap diversification too.