India’s large-cap funds saw significant inflows in June, even though they have underperformed year-to-date, according to a report by Vallum Capital. Despite being the worst-performing category this year with a 5.4% decline, large-cap funds attracted Rs 9,656 crore in inflows, mainly due to SIP-led automatic flows.
Mid-cap funds experienced a notable increase in inflows, surpassing Rs 1,336 crore, while small-cap funds attracted Rs 4,508 crore and achieved the highest year-to-date return of 9.3%. The healthcare sector stood out in 2026, delivering nearly 15% year-to-date returns.
Investors have shown a preference for businesses with predictable cash flows in the uncertain macro environment. Sectors like healthcare, including hospitals, diagnostics, and pharmaceuticals, witnessed increased inflows, with the sector delivering a 15% year-to-date return.
Total net asset-level inflows in June decreased to Rs 48,826 crore from Rs 56,886 crore in May, marking a 14% month-on-month decline. Equity inflows rose to Rs 48,914 crore, up by Rs 3,215 crore from May, despite modest returns of 1.8%. Fixed Income experienced net outflows of Rs 51,489 crore, while Money Market outflows deepened to Rs 57,277 crore, indicating a shift of institutional liquidity from defensive assets.
In contrast, Precious Metals attracted net inflows of Rs 8,678 crore, despite a negative 6.3% return in the month, suggesting an accumulation of gold during the correction. Real Estate surged by 14.4% in July, recovering losses from the past year.
Private banks witnessed a fresh inflow of Rs 802 crore in the previous month, while broader banking indices experienced outflows. Technology funds, despite a 17.3% decline this year, saw increased investor interest during the dip.
Although most consumption segments showed positive one-month returns, the broader consumption category faced outflows in June. FMCG remained one of the weakest-performing themes, down by 12.4% year-to-date.
