Inflows into equity mutual funds (MFs) continued their strong momentum in July, despite the market volatility triggered by the Union Budget.

Data from Amfi shows that NAV of every one in two BAFs declined 1.5% or less on Monday compared to a 3.13% decline in Nifty 500.

'Despite the current uncertainties, the long-term outlook remains constructive due to strong fundamentals, government initiatives, and a stable banking sector.'

Multi-asset allocation funds emerged as the most popular option for MFs as they provided the needed flexibility.

Commissions paid to mutual fund distributors (MFDs) increased by over 20 per cent for most large fund houses in 2023-24 (FY24), driven by a sharp market rally and strong inflows. The largest fund house, SBI Mutual Fund (MF), which now manages nearly Rs 10 trillion in assets, paid Rs 2,025 crore to its major distributors - 21 per cent higher than the Rs 1,675 crore payout in 2022-23 (FY23).

While the minimum holding period for LTCG taxation has now been lowered, the tax outgo could be a bit higher under the new structure.

The possible instances of front running at Quant Mutual Fund have likely pushed the Securities and Exchange Board of India (Sebi) to expedite the implementation of an institutional mechanism framework designed to curb such market abuses. This framework, approved by the Sebi board in April, was slated to take effect six months after its notification. But, recent developments have set the wheels of regulation turning faster.

Quant funds are a unique offering in the MF space as the investment decisions are driven by a blend of active and passive strategies.

Quant funds are a unique offering in the MF space as the investment decisions are driven by a blend of active and passive strategies.

'In an economy that is set to double in the coming years, stopping SIPs will take investors out of this growth path.'

A strong influx of 11 equity new fund offers (NFOs) in June, particularly within the thematic space, helped mutual funds collect Rs 14,370 crore - the highest ever via such introductory offers. This surpassed the previous high recorded in July 2021, where four NFOs accumulated Rs 13,709 crore, with ICICI Prudential MF's flexicap NFO alone mobilising Rs 9,808 crore.

'Barring a temporary blip where stocks fell on verdict day, we are back to all-time highs.'

'Indian investors have always been debt-heavy but with growing financial awareness they are getting comfortable with equities.'

Midcap stocks Hero MotoCorp, Zydus Lifesciences, JSW Energy, NHPC, Bharat Heavy Electricals, Bosch, and Samvardhana Motherson are expected to earn upgrades.

Active equity mutual fund schemes have improved their showing across key categories over the past three months vis-a-vis their benchmarks.

'Investors should do proper analysis before putting in their money in NFOs as most new launches are in the high-risk thematic space.'

Mutual funds' largecap investment universe is expected to see seven changes in the upcoming stock reclassification exercise by the Association of Mutual Funds in India (Amfi). According to a report by IIFL Securities, Hero MotoCorp, Zydus Lifesciences, JSW Energy, NHPC, Bharat Heavy Electricals, Bosch and Samvardhana Motherson are expected to earn upgrades in the revised list of largecap, midcap and smallcap stocks set to be released in the first week of July. Amfi revises the list at the start of January and July every year based on the previous six-month performance of the stock.

In May, MFs were the net sellers in several PSUs, as they deployed Rs 47,600 crore in equities during the month.

Unperturbed by election uncertainty, investors poured record sums into equity mutual fund (MF) schemes in May, driving India closer to a $5 trillion market capitalisation. The Rs 34,697 crore net inflows into actively managed equity funds last month surpassed the previous high of Rs 28,463 crore recorded in March 2022. In April 2024, equity schemes had garnered nearly Rs 19,000 crore.

Several investors wanting to invest in mutual fund schemes, amid the selloff in the market on Tuesday, were left in the lurch as online MF investment platforms failed to execute the transactions on time.