Due to the recent downturn in the stock market, Chinese equity funds have posted their first monthly decline in combined assets since last July.

With a fall of 0.43 percent in June, equity funds managed by professionals can still claim to outperform the CSI300 Index, which fell a total of 4.2 percent in the same month.

The CSI Index includes most of the big-cap stocks, which are also favorites of fund managers.

"The resilient performance of equity funds shows that most of them have a more risk-prevention stock portfolio," said Zhou Liang, China research manager at Lipper.

Except for equity funds, all other mutual fund classifications showed increased assets in June. Mixed-asset aggressive funds rose 1.77 percent, followed by mixed-asset balance funds, up 0.87 percent, while mixed-asset flexible funds increased 0.44 percent, according to statistics from Lipper, which tracks the performance of mutual funds.

"From my experiences in other markets, mutual funds usually outperform the stock index when the stock market is volatile or down," said Lou Jing, an analyst at Haitong Securities.

"This is because most mutual funds are invested in stocks of large and well-managed companies, which are more resistant to market fluctuations," she said.

According to statistics compiled by the fund research center of China Galaxy Securities, the combined assets of 347 mutual funds rose 201 percent in the past six months to 1,799.07 billion yuan. At the same time combined assets of equity funds jumped 127 percent to 1,671.12 billion yuan, accounting for 31.25 percent of the circulating A-share market value. The number of equity funds also increased from 230 to 251.

"Mutual funds have become a major player in the stock market," said Hu Lifeng, chief analyst at China Galaxy Securities.

Among all the equity funds, the index funds performed best, with combined assets jumping 73.37 percent in the first half this year, far more than the 40 percent rise in the Shanghai Composite Index.