New Delhi, Sept. 10 -- Investors are increasingly piling into riskier small- and mid-cap mutual funds while moving away from index-linked large-cap funds, tempted by strong recent performance in the broader market.

Large-cap funds have seen net outflows for two consecutive months. In August, the category saw an outflow of Rs.1,147 crore, following a net outflow of Rs.1,321 crore in July, according to data from the Association of Mutual Funds in India (AMFI).

In contrast, small-cap and mid-cap funds continued to attract strong flows. Small-cap funds recorded their highest monthly inflow in two years at Rs.7,973 crore in August. Mid-cap funds also saw strong inflows of Rs.6,989 crore, their highest in two years.

Viraj Gandhi, chief execu...