The second driver was opportunistic buying in diversified equity funds and exchange traded funds (ETFs) as valuations turned more reasonable after the market drop. A portion of this came from provident funds, which can invest up to 15% of assets in equities, with family offices and high net-worth individuals (HNIs) also stepping up allocations.
The third was a shift in investor mindset. “The moment market fell, people got convinced that they should invest when the market is falling,” Balasubramanian said. He added that investors are showing far more maturity during bouts of uncertainty than they did in past cycles, when rallies tended to draw the biggest flows.
Akhil Chaturvedi of Motilal Oswal AMC said the difference is stark — “earlier, market corrections would lead to higher redemptions, but now investors are taking a positive view and using the opportunity to invest.”Industry data backs that up. Association of Mutual Funds in India (AMFI) numbers show that sectoral and thematic funds alone attracted ₹9,426 crore in July, up from just ₹476 crore in June.
Balasubramanian believes the confidence is rooted in India’s long-term growth story, but he cautioned that the next year may not be as strong on the earnings front. Even so, he says staying invested through such phases remains key to building wealth over time.
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