In September, mutual funds experienced notable trends, marked by thriving sectoral funds, a slowdown in equity inflows, and debt schemes facing outflows. Sectoral/thematic funds attracted the highest net inflows, particularly driven by new launches. Equity inflows dipped to Rs 14,091.2 crore, influenced by profit booking in smallcap and midcap funds amid high market valuations. Notably, large-cap funds witnessed their fifth consecutive month of net outflows. Hybrid funds saw a record net inflow of Rs 18,650.45 crore, indicating investors’ interest in diversification and capital protection. Debt-oriented schemes faced a second consecutive month of outflows, primarily attributed to corporate advance tax requirements and a market correction.