Net inflows into equity mutual funds fell 3.2 percent over the last month to Rs 24,269.26 crore in April, data released by the Association of Mutual Funds of India (AMFI) on May 9 showed.
However, after April, net inflows into open-ended equity funds have stayed in the positive zone for the 50th month in a row starting from March 2021
The slight fall in inflows has come despite the decent market recovery last month. In April, BSE benchmark Sensex jumped 3.65 percent, while NSE Nifty 50 spiked 3.46 percent.
Meanwhile, monthly inflows through the Systematic Investment Plan (SIP) route into mutual funds rose 2.72 percent to a fresh all-time high of Rs 26,632 crore in April.
According to the Association of Mutual Funds in India (AMFI) chief Venkat Chalasani, while geopolitical developments and border tensions may introduce short-term market volatility, investors are encouraged to stay focused on their long-term financial goals.
"Reacting impulsively to temporary market movements can derail investment strategies. India's economic fundamentals remain resilient, and the long-term growth outlook continues to be strong and promising,” he said.
Equity funds
In the equity segment, Midcap Fund and Smallcap Fund segments saw drop in inflows during April.
Net inflows into Midcap funds inched lower by 3.6 percent to Rs 3,313.98 crore, while smallcap funds saw drop of 2.3 percent in net investments to Rs 3,999.95 crore. On the other hand, relatively safer largecap funds saw 7.8 percent rise in inflows to Rs 2,671.46 crore.
The biggest jump in inflows came in Sectoral/Thematic Funds, which saw 1,076.4 percent rise in inflows to Rs 2,000.95 crore.
The quantum of flows remains significant, especially in the backdrop of a challenging global landscape and escalating geopolitical tensions between India and Pakistan following the Pahalgam terrorist attack on April 22.
“The sustained inflows underscore improving investor sentiment, supported by strong corporate earnings, resilient macroeconomic fundamentals, and a continued tilt towards equities as the preferred asset class,” said Himanshu Srivastava – Associate Director- Manager Research, Morningstar Investment Research India.
April marked the fourth consecutive month of declining net equity inflows, bringing them to their lowest level in the past 12 months.
“This softening is likely driven by mounting global uncertainties, particularly the intensifying U.S.-led tariff war and the deteriorating regional security climate. These factors have led some investors to adopt a cautious stance, reassessing their risk appetite—particularly in emerging markets like India that are vulnerable to external shocks,” Srivastava added.
Debt funds
In the fixed-income segment, debt mutual funds saw net inflows of Rs 2.19 lakh crore last month.
In debt funds, short-term liquid funds saw inflows of Rs 1.19 lakh crore during April against net outflows of Rs 1.33 lakh crore in March. Further Money Market Fund also saw net inflows of Rs 31,507.04 crore last month.
On the other hand, small outflows were seen in Credit Risk Fund, Gilt Fund and Gilt Fund with 10 year constant duration categories.
"Fixed income category saw a large inflow. Many institutional investors who redeem due to year end, invested back in categories like liquid, ultra-short term," said Manish Mehta, National Head - Sales, Marketing & Digital Business, Kotak Mahindra AMC.
Gold funds
Gold exchange-traded funds (ETFs) witnessed a modest net outflow of Rs 5.82 crore in April 2025. However, this was significantly better than March, when the category witnessed a net outflow of Rs 77.21 crore.
The reversal, though subdued in magnitude, suggests that the profit-booking phase seen in March may have run its course, with some investors selectively re-entering positions in anticipation of continued global uncertainties and structural support for gold prices.
“The improvement in net flows in April could be attributed to the renewed concerns over inflationary pressures and a volatile geopolitical environment, which continue to bolster the appeal of gold as a strategic hedge. Moreover, gold prices stabilising towards the month end may have encouraged fresh allocations from investors seeking to capitalize on potential upside while maintaining portfolio diversification,” said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India.
Overall, the Indian mutual fund industry saw net inflows of Rs 2.77 lakh crore in April on account of all-round buying in mutual funds.
Also, thanks to the mark-to-market (MTM) gains in equity assets, the overall net assets under management (AUM) of the Indian mutual fund industry rose to Rs 69.99 lakh crore in April against Rs 65.74 lakh crore in March.
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