Mutual Funds

Equity mutual fund inflows rose sharply to Rs 40,450 crore in March, up from Rs 25,978 crore in February, according to data released by the Association of Mutual Funds in India (AMFI). The strong inflows come despite continued volatility in equity markets, indicating sustained investor participation in market-linked investment products. However, the overall mutual fund industry recorded net outflows of Rs 2.39 lakh crore in March, compared with net inflows of Rs 94,543 crore in February, largely due to significant redemptions in debt funds. Debt mutual funds saw massive net outflows of Rs 2.94 lakh crore during the month, reversing the Rs 42,106 crore inflows seen in February. Such sharp swings are typically driven by institutional and treasury movements, especially toward the end of financial periods. Hybrid schemes also witnessed outflows of Rs 16,538 crore in March, compared with inflows of Rs 11,983 crore in the previous month, suggesting some pullback from balanced investment strategies. Meanwhile, ‘other schemes’, including ETFs, recorded inflows of Rs 30,768 crore, higher than Rs 13,879 crore seen in February, providing some support to overall industry flows. Solution-oriented schemes, including retirement and children’s funds, continued to see steady inflows at Rs 256 crore, broadly in line with Rs 247 crore in February. Closed-ended and interval schemes recorded inflows of Rs 226 crore during the month. Gold exchange-traded funds (ETFs) saw inflows of Rs 2,266 crore in March, lower than Rs 5,255 crore in February, indicating some moderation after recent strong inflows into the category. Overall, the data indicates a divergence in investor behaviour, with strong and rising participation in equity funds even as large institutional outflows from debt funds weighed on total industry flows. This marks a 55.71 percent jump in equity inflows on a month-on-month basis, reflecting a sharp rebound in investor participation. Equity funds: Broad-based surge across categories Equity mutual fund inflows rose sharply to Rs 40,450 crore in March from Rs 25,978 crore in February, marking a strong recovery after relatively moderate inflows in the previous two months. “Equity inflows rose sharply in March, as investors used market corrections as a buying opportunity while continuing to favour diversified strategies like flexi-cap funds,” says Himanshu Srivastava, Principal Research, Morningstar Investment Research India. The surge was broad-based across categories, with most segments seeing higher inflows. Flexi-cap funds remained the largest contributor, attracting Rs 10,054 crore, up from Rs 6,925 crore in February and broadly in line with the Rs 10,019 crore seen in December. Mid-cap and small-cap funds also saw strong inflows. Mid-cap funds received Rs 6,064 crore, compared with Rs 4,003 crore in February, while small-cap funds drew Rs 6,264 crore, up from Rs 3,881 crore a month earlier, indicating sustained investor interest in higher-growth segments. Large-cap funds saw inflows rise to Rs 2,998 crore from Rs 2,112 crore in February, suggesting improved participation in relatively stable segments. Large- and mid-cap funds recorded Rs 5,307 crore in inflows, up from Rs 3,138 crore in February, while multi-cap funds attracted Rs 2,982 crore, compared with Rs 1,934 crore in the previous month. Focused funds also saw a sharp increase, with inflows rising to Rs 2,425 crore from Rs 901 crore in February. Sectoral and thematic funds, however, saw a slight moderation at Rs 2,699 crore, compared with Rs 2,987 crore in February. ELSS funds continued to see outflows, though the pace eased slightly to Rs 437 crore from Rs 650 crore in February. Overall, the data suggests strong and diversified equity participation, with inflows increasing across both core and satellite categories. Debt funds: Sharp outflows led by liquid and overnight funds Debt mutual funds witnessed massive outflows of Rs 2.94 lakh crore in March, a sharp reversal from inflows of Rs 42,106 crore in February. The outflows were driven largely by liquidity-oriented categories, particularly liquid funds, which saw redemptions of Rs 1.35 lakh crore compared with inflows of Rs 59,077 crore in February. Overnight funds also recorded significant outflows of Rs 40,228 crore, reversing inflows seen in earlier months. Money market funds saw outflows of Rs 29,207 crore, compared with inflows of Rs 6,267 crore in February, while low-duration funds recorded outflows of Rs 25,227 crore. Corporate bond funds saw outflows widen sharply to Rs 15,293 crore from Rs 2,302 crore in February. Outflows were also visible across most duration categories, including short-duration, gilt, and dynamic bond funds, indicating a broad-based pullback. “Debt fund outflows in March were largely driven by quarter-end institutional and treasury adjustments, particularly in liquid and short-term categories, rather than any structural shift in sentiment,” says Nehal Meshram, Senior Analyst, Morningstar Investment Research India. The sharp reversal suggests large institutional and treasury-driven redemptions, a pattern typically seen at financial year-end. Hybrid funds: Shift to outflows Hybrid schemes recorded outflows of Rs 16,538 crore in March, compared with inflows of Rs 11,983 crore in February and Rs 17,356 crore in January. The reversal indicates some cooling in investor allocations to balanced strategies after consistent inflows in previous months. Gold ETFs: Inflows moderate after recent spike Gold ETFs recorded inflows of Rs 2,266 crore in March, down from Rs 5,255 crore in February and significantly lower than the sharp spike of Rs 24,040 crore seen in January. Despite the moderation, inflows remained higher than some earlier months, such as November (Rs 3,742 crore), indicating that investors continue to use gold as a diversification tool. “Gold ETF inflows remained positive despite moderation, indicating continued investor interest in gold as a diversification tool amid market uncertainty,” adds Meshram. The trend suggests that while the peak momentum seen earlier has cooled, investor interest in gold remains intact. SIP flows: Steady despite volatility Systematic investment plan (SIP) contributions rose to Rs 32,086.78 crore in March, up from Rs 29,845 crore in February. SIP assets stood at Rs 15,10,942.99 crore during the month, accounting for about 20.5% of the overall mutual fund AUM, while the number of contributing accounts reached 9.71 crore. The steady rise in contributions and account base suggests that retail investors continue to stay committed to disciplined, long-term investing, even as markets remain volatile and largely range-bound. “SIP inflows reaching a record Rs 32,087 crore in March highlight the deepening trust of Indian investors in systematic, long-term wealth creation, even amid global uncertainties,” said Navneet Munot, MD & CEO, HDFC Asset Management Company. AUM: Equity assets decline, debt sees sharp drop Assets under management (AUM) for equity mutual funds declined to Rs 31.98 lakh crore in March from Rs 35.39 lakh crore in February, reflecting the impact of market movements during the month. Debt fund AUM also fell sharply to Rs 16.52 lakh crore from Rs 19.44 lakh crore in February, in line with the significant outflows seen across debt categories. Takeaway The March data shows a clear split in investor behaviour. While large outflows from debt funds pulled down overall flows, equity funds continued to see strong inflows. Vaibhav Chugh, CEO, Abakkus Mutual Fund says, “March flows show investors are becoming more allocation-driven, using corrections to add rather than exit. We are seeing continued interest in equities, with flexibility-oriented categories like flexicap gaining traction, while some movement towards debt and gold reflects a balanced approach in volatile markets." 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Apr 10 2026, 15:45