New Delhi, Oct. 12 -- Small-cap and mid-cap funds attracted record monthly inflows in September, accounting for 44% of total net equity mutual fund inflows even as a market correction tested investor appetite. The concentration also raises questions about liquidity if investors rush to redeem their holdings.

Small-cap funds received net inflows of Rs.9,038 crore in September, surpassing their previous record of Rs.7,973 crore in August. Mid-cap funds attracted Rs.7,834 crore, also exceeding their previous monthly high of Rs.6,989 crore, set in August, according to data from the Association of Mutual Funds in India (Amfi).

The tilt towards small-cap funds has strengthened over time. Their share of gross equity mutual fund inflows average...