Hybrid, Arbitrage Funds See Higher Inflows; Equity MF Inflows Up 24% in June

Investor flows into hybrid and arbitrage mutual fund schemes gained momentum in June 2025, reflecting a cautious approach amid market volatility. Hybrid schemes recorded the highest monthly inflows at ₹232.23 billion, while arbitrage schemes also saw strong inflows of ₹155.85 billion. This followed an all-time high inflow of ₹157.02 billion in arbitrage schemes during May.

The broader mutual fund industry saw total net inflows rise to ₹493.01 billion, a 68% increase over May, driven by higher interest across equity and hybrid categories.

Equity mutual fund inflows rose 24% month-on-month to ₹235.87 billion in June from ₹190.13 billion in May, marking the 52nd consecutive month of positive flows. Flexi-cap funds attracted the highest equity inflows at ₹57.33 billion, a 49% increase from May. Small-cap and mid-cap funds followed, with inflows of ₹40.24 billion and ₹37.54 billion, respectively. All equity fund sub-categories except ELSS reported positive net flows.

Systematic Investment Plan contributions remained steady, with monthly inflows at ₹272.69 billion. 

Passive fund categories reported a decline in net flows. Index funds saw inflows of ₹10.43 billion, while other ETFs attracted ₹8.44 billion. Gold ETFs stood out among passive schemes, drawing ₹20.80 billion — a sharp increase from May. 

Total assets under management rose to ₹74.14 trillion in June, up from ₹71.93 trillion in May, supported by mark-to-market gains in equities. Benchmark indices,  Nifty and Sensex gained 2.7% and 3.1%, respectively, during the month despite continued global trade and geopolitical uncertainties.