New Delhi, Sept. 11 -- Inflows into equity mutual funds cooled in August after a record surge, as trade tensions and geopolitical risks influenced investors to move away from highly volatile assets.

Equity mutual fund inflows dropped 21.7% in August to Rs.33,430.37 crore from Rs.42,702.35 crore in July, with inflows into small-cap funds dropping sharply by 23% to Rs.4,992 crore, as lofty valuations and lack of earnings visibility led investors to pause allocations.

Mid-cap mutual funds saw a marginal gain of 2%, with inflows totaling Rs.5,330.62 crore, according to AMFI. However, investors shifted their attention toward large-cap stocks, seeking stability amid uncertain times, while their reasonable valuations have also made them prefer...