Winning Bizness Desk

Mumbai.Investors continue to pour money into large-cap mutual funds through Systematic Investment Plans (SIPs), even as mid-cap and small-cap schemes have significantly outperformed them in returns this year.

The latest June 2026 data highlights a clear divide between automated SIP investing and active investment decisions. While regular SIP flows kept large-cap funds at the top of the inflow chart, investors making fresh discretionary bets increasingly preferred mid-cap and small-cap funds in search of stronger returns.

Large-cap funds retained investors' confidence despite weaker returns

Large-cap mutual funds received the highest inflows among all equity categories in June, attracting Rs 9,656 crore despite delivering the weakest year-to-date return of minus 5.4%.

The continued inflow has largely been driven by automatic SIP investments and passive asset allocation strategies, indicating that long-term investors are sticking to disciplined investing rather than reacting to short-term market performance. Analysts say this trend reflects the growing maturity of retail investors, who continue investing through market cycles instead of chasing recent winners.

• Large-cap funds attracted Rs 9,656 crore in June.
• They posted the weakest YTD return of minus 5.4%.
• SIP contributions remained the biggest driver of inflows.

Mid- and small-cap funds attract active investors

Unlike SIP investors, those actively selecting mutual funds are gradually shifting towards mid-cap and small-cap schemes.

Mid-cap funds recorded the sharpest rise in monthly inflows, receiving Rs 1,336 crore more than the previous month. Small-cap funds also continued to attract strong interest, with net inflows of Rs 4,508 crore during June. More importantly, the category emerged as the best-performing equity segment this year, delivering a year-to-date return of 9.3%.

The trend suggests investors are willing to take calculated risks in pursuit of higher growth opportunities while continuing their SIP commitments in relatively safer large-cap funds.

Healthcare sector emerges as investors' favourite

Among sectoral funds, healthcare remained the standout performer in 2026.

The sector has generated nearly 15% year-to-date returns, making it the best-performing thematic segment so far this year. Investors added another Rs 294 crore to healthcare funds during June, favouring businesses such as hospitals, diagnostic chains and pharmaceutical companies that offer relatively stable cash flows even during uncertain market conditions.

Private banking funds also witnessed selective buying. They attracted fresh investments worth Rs 802 crore in June, even as the broader banking index saw outflows, indicating investors preferred carefully chosen private banks over the sector as a whole.

• Healthcare delivered nearly 15% YTD returns.
• Healthcare funds received Rs 294 crore of additional inflows.
• Private banking funds attracted Rs 802 crore despite banking index outflows.

Overall mutual fund inflows ease despite equity demand

Overall net asset-level inflows declined 14% month-on-month from Rs 56,886 crore in May to Rs 48,826 crore in June. However, equity mutual funds remained the preferred investment avenue for retail investors.

Net equity fund inflows rose to Rs 48,914 crore in June, an increase of Rs 3,215 crore over May, despite the category delivering only a modest 1.8% return during the month. The data indicates that investors continue to favour long-term wealth creation through equities, with SIPs providing stability while active investors selectively chase higher-growth opportunities across market segments.

• Total net asset inflows fell 14% in June.
• Equity fund inflows climbed to Rs 48,914 crore.
• Strong SIP participation continues to support long-term equity investing.