June 2025 Mutual Fund Trends: Mid & Small-Caps Continue to Shine, Value Funds Rebound

Retail participation in mutual funds remains strong in June 2025, with inflows led by mid-cap and small-cap funds, reflecting investor confidence in India’s growth trajectory. Interestingly, Value Funds staged a comeback, suggesting a strategic shift among investors toward undervalued segments of the market.

Key Highlights from June 2025 Mutual Fund Data

Net Inflows (₹ Crore):

• Small Cap Fund: ₹4,024 crore
• Mid Cap Fund: ₹3,754 crore
• Large Cap Fund: ₹1,694 crore
• Value/Contra Fund: ₹1,159 crore (up from a ₹92 crore outflow in May)
• Sectoral/Thematic Funds: ₹476 crore

Folio Growth (No. of New Investors):

• Mid Cap Fund: +4.67 lakh
• Small Cap Fund: +3.65 lakh
• Sectoral/Thematic Funds: +1.57 lakh
• Large Cap Fund: +1.29 lakh
• Value/Contra Fund: +81,935

Assets Under Management (AAUM) Snapshot:

• Sectoral/Thematic Funds: ₹4.99 lakh crore (↑ 3.8% MoM)
• Mid Cap Fund: ₹4.19 lakh crore (↑ 5.95% MoM)
• Large Cap Fund: ₹3.89 lakh crore (↑ 2.45% MoM)
• Small Cap Fund: ₹3.44 lakh crore (↑ 7.04% MoM)
• Value/Contra Fund: ₹1.99 lakh crore (↑ 3.00% MoM)

What Does It Indicate?

Retail Optimism Remains Strong

The surge in small- and mid-cap fund folios and inflows indicates that retail investors remain optimistic about broader market opportunities and are willing to look beyond the safety of large caps.

Smart Rotation to Value

The shift of ₹1,159 crore into Value/Contra Funds, following a net outflow last month, suggests that savvy investors are seeking opportunities in undervalued stocks amid premium valuations in growth-heavy sectors.

Sectoral Participation Holds Up

The sectoral and thematic funds, although not leading the inflow charts, saw consistent participation, possibly driven by focused themes such as EVs, infrastructure, pharma, and digital.

Investor Takeaway

June’s mutual fund data reveals two core investor trends:

1. Confidence in Growth Potential — The pursuit of higher returns continues through small and mid-cap stocks.
2. Cautious Optimism — Investors are hedging growth bets by diversifying into value funds.

With AAUM rising across all categories, the mutual fund space appears to be growing both in scale and investor maturity.