Large-Cap Mutual Funds See First Outflows in Nearly Three Years

Mutual funds are like big piggy banks where many people put their money together to invest in stocks and bonds.

A large-cap fund buys shares of very big, well-known companies, while small-cap and mid-cap funds invest in smaller companies.

In July, for the first time since December 2023, investors in India pulled money out of large-cap funds.

At the same time, they put more money into small-cap and mid-cap funds, which were doing better than the rest of the market.

Overall, new money flowing into equity mutual funds fell by about 15% from June to July.

Foreign investors came back to Indian stocks in July after four months, which gave local investors a chance to book profits.

Regular monthly savings plans, called SIPs, stayed very popular, with more than Rs 30,000 crore coming in for a fifth month in a row and about 1.1 million new plans added.

Money also flowed back into bond funds, and the whole mutual fund industry took in about Rs 2.4 lakh crore in new money during the month.

Finance Minister Nirmala Sitharaman has said personal payments will not cost more, but industry leaders say it is too early to know if any new charges on UPI payments will affect investments.