Topic 6: MUTUAL FUND: FRESH FLOWS

The Indian mutual fund industry witnessed a mixed month in June 2026, characterised by resilient retail participation despite subdued market returns and heightened global uncertainty. Equity fund inflows, which had already declined sharply in May amid volatility arising from the Israel-Iran conflict and elevated crude oil prices, remained softer in June as investors adopted a cautious stance. However, inflows continued to hover around their long-term average, reflecting sustained confidence in equities. Systematic Investment Plans (SIPs) remained the industry's biggest strength, with monthly contributions holding steady at nearly ₹31,000 crore. The resilience of SIPs highlighted investors' continued commitment to long-term wealth creation despite short-term market fluctuations. Nevertheless, the industry faced a significant challenge as equity fund returns remained largely muted over the past year, with many active funds still below their previous highs and trailing debt funds on a one-year rolling basis. The month also saw continued product innovation. Asset management companies expanded their passive and goal-based offerings through new index funds and India's first target-date (life-cycle) funds following SEBI's new regulatory framework. Meanwhile, SEBI's proposal to introduce performance-linked fund management fees sparked industry-wide discussions on better aligning fund manager incentives with investor outcomes. Alongside regulatory updates, several AMCs announced fund mergers, management changes and operational enhancements, underscoring the industry's focus on innovation, efficiency and long-term investor engagement.



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