Equity Mutual Fund Inflows Reach Eight-Month High in March
Mutual Fund Inflows and Outflows Overview
In March 2026, net inflows into equity-focused mutual funds surged 56% month-on-month, totaling Rs 40,450 crore, marking the highest level since July 2025, according to data from the Association of Mutual Funds in India (AMFI).
Conversely, debt-focused funds experienced significant outflows amounting to Rs 2.95 lakh crore. Overall, the mutual fund industry registered net outflows of Rs 2.40 lakh crore, in stark contrast to inflows of Rs 94,530 crore recorded in the previous month.
Systematic Investment Plans and Segment Performance
The contribution of systematic investment plans (SIPs) in mutual fund flows reached a record high of Rs 32,087 crore in March, up from Rs 29,845 crore in February. It is noteworthy that February had fewer days, which may have impacted the inflow numbers.
Within equity funds, flexi-cap funds emerged as the largest contributors, witnessing inflows that increased by 45% to Rs 10,054 crore. Mid-cap and small-cap funds also demonstrated strong performance, with inflows rising 51% to Rs 6,063 crore and 61% to Rs 6,263.56 crore, respectively. In contrast, all other categories, except for sectoral and thematic funds, also saw inflow growth during the month.
Average AUM and Market Conditions
Despite the increase in inflows, the average assets under management (AUM) for equity mutual funds fell below Rs 32 lakh crore, declining from Rs 35.6 lakh crore the previous month. This reduction is attributed to a significant correction in the equity markets during that period.
In March, the benchmark Sensex index dropped over 11% due to escalating conflict in West Asia and rising crude oil prices, negatively influencing investor sentiment. Nitin Agrawal, CEO of mutual funds at InCred Money, noted that while the reported net outflow of Rs 2,39,910 crore and declining AUM may alarm investors, these figures are misleading when viewed in isolation. He emphasized that the AUM decline primarily reflects a mark-to-market effect resulting from the sharp equity market downturn rather than a lack of investor confidence.
Agrawal further mentioned that the net outflow is largely a result of redemptions in debt funds, a pattern frequently observed at the end of the quarter. He highlighted flexi-cap funds as a key segment for inflows, underscoring the significance of diversification across market caps during volatile periods.
ETFs and Future Trends
Investments in gold and silver exchange-traded funds (ETFs) have shown a tepid trend following record inflows in January. In March, gold ETFs secured inflows of Rs 2,266 crore, a decrease from Rs 5,255 crore in February and a peak of Rs 24,040 crore in January. Meanwhile, outflows in silver ETFs decreased to Rs 684 crore from Rs 826 crore the previous month.
Agrawal interpreted the moderation in gold ETF inflows as a sign of renewed optimism toward equities. However, flows into other ETFs experienced a significant increase, quadrupling to Rs 19,802 crore, with index funds seeing their inflows nearly triple to Rs 8,169 crore. Kunal Rambhia, a fund manager and trading strategist at The Streets, indicated that investors are currently making a cyclical shift towards equity ETFs.
Follow US
https://www.facebook.com/charchaexpress
https://www.youtube.com/@charcha-express
https://www.instagram.com/charcha.express/
Contents
Mutual Fund Inflows and Outflows OverviewIn March 2026, net inflows into equity-focused mutual funds surged 56% month-on-month, totaling Rs 40,450 crore, marking the highest level since July 2025, according to data from the Association of Mutual Funds in India (AMFI).Conversely, debt-focused funds experienced significant outflows amounting to Rs 2.95 lakh crore. Overall, the mutual fund industry registered net outflows of Rs 2.40 lakh crore, in stark contrast to inflows of Rs 94,530 crore recorded in the previous month.Systematic Investment Plans and Segment PerformanceThe contribution of systematic investment plans (SIPs) in mutual fund flows reached a record high of Rs 32,087 crore in March, up from Rs 29,845 crore in February. It is noteworthy that February had fewer days, which may have impacted the inflow numbers.Within equity funds, flexi-cap funds emerged as the largest contributors, witnessing inflows that increased by 45% to Rs 10,054 crore. Mid-cap and small-cap funds also demonstrated strong performance, with inflows rising 51% to Rs 6,063 crore and 61% to Rs 6,263.56 crore, respectively. In contrast, all other categories, except for sectoral and thematic funds, also saw inflow growth during the month.Average AUM and Market ConditionsDespite the increase in inflows, the average assets under management (AUM) for equity mutual funds fell below Rs 32 lakh crore, declining from Rs 35.6 lakh crore the previous month. This reduction is attributed to a significant correction in the equity markets during that period.In March, the benchmark Sensex index dropped over 11% due to escalating conflict in West Asia and rising crude oil prices, negatively influencing investor sentiment. Nitin Agrawal, CEO of mutual funds at InCred Money, noted that while the reported net outflow of Rs 2,39,910 crore and declining AUM may alarm investors, these figures are misleading when viewed in isolation. He emphasized that the AUM decline primarily reflects a mark-to-market effect resulting from the sharp equity market downturn rather than a lack of investor confidence.Agrawal further mentioned that the net outflow is largely a result of redemptions in debt funds, a pattern frequently observed at the end of the quarter. He highlighted flexi-cap funds as a key segment for inflows, underscoring the significance of diversification across market caps during volatile periods.ETFs and Future TrendsInvestments in gold and silver exchange-traded funds (ETFs) have shown a tepid trend following record inflows in January. In March, gold ETFs secured inflows of Rs 2,266 crore, a decrease from Rs 5,255 crore in February and a peak of Rs 24,040 crore in January. Meanwhile, outflows in silver ETFs decreased to Rs 684 crore from Rs 826 crore the previous month.Agrawal interpreted the moderation in gold ETF inflows as a sign of renewed optimism toward equities. However, flows into other ETFs experienced a significant increase, quadrupling to Rs 19,802 crore, with index funds seeing their inflows nearly triple to Rs 8,169 crore. Kunal Rambhia, a fund manager and trading strategist at The Streets, indicated that investors are currently making a cyclical shift towards equity ETFs.
