Daijiworld Media Network - Mumbai
Mumbai, Sep 17: Eight equity mutual funds recorded remarkable growth in August 2025, each witnessing inflows or net asset growth of over Rs 500 crore in their direct plans alone, signalling robust investor sentiment.
Among the standout performers were flexi-cap funds, with Parag Parikh Flexi Cap and HDFC Flexi Cap together adding nearly Rs 5,000 crore in assets during the month. Analysts said the trend underscores investors’ preference for flexibility, allowing fund managers to shift allocations across large, mid, and small-cap stocks depending on market conditions.
It was not just flexi-cap funds that gained. ICICI Prudential Value Discovery and Bandhan Small Cap Fund also featured in the list, reflecting continuing interest in value-oriented and small-cap strategies, even as inflows into the small-cap category have moderated in recent months.
Industry experts noted that most of the funds attracting large inflows are backed by strong long-term records. Nippon India Large Cap, for instance, is the top performer in its category over 10 years and second-best over five years. Parag Parikh Flexi Cap and HDFC Flexi Cap too have consistently ranked among the best over both five- and ten-year periods.
However, performance is not uniform. ICICI Prudential Value Discovery, though recovering strongly in the past five years, remains in the bottom half on a 10-year basis. Kotak Flexi Cap has delivered only middle-of-the-pack returns despite significant growth in assets under management (AuM).
Market analysts caution that sharp AuM growth is a signal of investor trust but not a guarantee of future performance. Rising assets could be driven both by market gains and fresh investor inflows, and large fund sizes sometimes pose challenges in deploying capital efficiently, particularly in mid- and small-cap stocks.
Experts advise investors to look beyond short-term trends and consider long-term returns, consistency, portfolio concentration, expense ratios, and the track record of fund managers before making decisions. Popular funds, they warn, may not always outperform across market cycles.
With flexi-cap funds providing adaptability, and value and small-cap funds offering diversification potential, analysts stress that investors should align choices with their long-term goals rather than chase monthly inflow trends.