SIP flows continue favouring large caps despite smaller segments outperforming: Report

New Delhi [India], July 19 (ANI): Systematic Investment Plan (SIP)-driven inflows continued to favour large-cap funds in June despite stronger returns from mid- and small-cap segments, indicating that automatic investments are supporting large-cap funds while discretionary money is increasingly moving towards smaller companies, according to Vallum Capital's July 2026 Cross-Asset Macro Grid report.
The report noted that large-cap funds received the highest inflows of Rs 9,656 crore in June, even though they remained the weakest-performing market-cap category with a negative 5.4 per cent year-to-date return. Mid-cap funds recorded the sharpest increase in monthly inflows, while small-cap funds continued to attract healthy investments alongside the strongest returns.
"Large-Cap received the highest June flows at ₹9,656 Cr (+₹1,188 Cr) despite being the worst performer at -5.4% YTD as well as on a month relative to other caps. SIP inertia sustaining the market's biggest loser while Mid-Cap saw the sharpest flow acceleration (+₹1,336 Cr to ₹5,460 Cr); rotation into small-cap stays intact," the report said.
According to the report, equity as an asset class continued to attract fresh investments in June even as investors reduced allocations to debt and money market funds.
It said equity inflows rose to Rs 48,914 crore in June from Rs 45,699 crore in May, while fixed-income funds saw net outflows of Rs 51,489 crore and money market funds recorded outflows of Rs 57,277 crore. Precious metals, meanwhile, attracted net inflows of Rs 8,678 crore despite delivering a negative 6.3 per cent return over the previous month.
"Commodities flipped to Rs 8,678 crore inflows in June despite -6.3% drawdown in last 1m, while Money Market outflows deepened to Rs 57,277 crore, confirming institutional liquidity is being forcibly redeployed into risk assets," the report said.
Among sectoral themes, healthcare remained the strongest performer with nearly 15 per cent year-to-date returns, while technology funds continued to attract investor interest despite weak performance this year.
"Technology absorbed Rs 412 Cr in June, second only to BFSI in net thematic inflows despite -17.3% YTD IT Returns; while Healthcare and Real Estate hold structural leadership, reflecting a decisive market tilt toward cashflow-generating, hard-asset themes," the report said.
Within financials, Vallum Capital said investors were becoming increasingly selective rather than exiting the sector altogether.
"Private Banks absorbed Rs 1,137 cr in June (+Rs 802 Cr) despite -2.4% YTD while Banks-Broad bled Rs 1,312 Cr (-Rs 925 Cr deeper); investors aren't exiting banking, they're rotating from passive broad exposure to selective private-sector conviction," the report added.
The report also said consumption continued to remain one of the weaker investment themes despite positive short-term returns across most sub-categories, with broad consumption funds continuing to witness net outflows in June. (ANI)