Equity mutual fund inflows hit 11-month low of Rs 25,082 crore in March: AMFI

In March, BSE benchmark Sensex jumped 5.77 percent, while NSE Nifty 50 spiked 6.30 percent.

Net inflows into equity mutual funds fell 14 percent over the last month to Rs 25,082.01 crore in March, data released by the Association of Mutual Funds of India (AMFI) on April 11 showed.

After March, net inflows into open-ended equity funds have stayed in the positive zone for the 49th month in a row.

The fall in inflows has come despite the decent market recovery last month. In March, BSE benchmark Sensex jumped 5.77 percent, while NSE Nifty 50 spiked 6.30 percent.

Earlier, the net equity mutual fund inflow for February slumped by 26 percent over a month ago to Rs 29,303.34 crore amid deep market correction during the month.

The monthly inflow through the Systematic Investment Plan (SIP) route into mutual funds marginally fell to a four-month low of Rs 25,926 crore in March, despite equity markets staging a recovery, latest data from AMFI has showed on April 11.

"Mutual fund industry has demonstrated resilience and growth, despite market volatility and global policy uncertainties driven by frequent US tariff changes. As of March, we have seen a 31.85 percent year-over year increase in folio count, with our Assets Under Management (AUM) reaching Rs 65.74 lakh crore, up from Rs 53.40 lakh crore in March 2024, representing a 23.11 percent increase in FY 2024-25,” said Venkat Nageswar Chalasani, Chief Executive, AMFI.

Equity fund category

In the equity fund category, the drop in inflows in March came on the back of a fall in net investments into Sectoral/Thematic Funds. Net inflows into the category crashed 97 percent from Rs 5,711.58 crore in February to Rs 170.09 crore in March.

Further, inflows into riskier smallcap and midcap funds came in on the higher side. In March, net investments into smallcap funds rose 10 percent to Rs 4,092.12 crore, while inflows into midcap funds inched up 0.9 percent to 0.9 Rs 3,438.87 crore. However, inflows into largecap funds slumped 13.5 percent to Rs 2,479.31 crore.

"Despite the market volatility, the overall flows into equity funds remain relatively resilient, indicating that investors are not making panic-driven decisions. The overall flows are impacted because of large outflows of debt which is traditionally seen in year end cycles," Suranjana Borthakhur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India).

Notably, only four New Fund Offers (NFOs - (Samco Large Cap Fund, Helios Mid Cap Fund, Mahindra Manulife Value Fund and Motilal Oswal Active Momentum Fund)) were launched and concluded during the month, significantly lower than the preceding months, further contributing to the dip in overall inflows.

"Additionally, market volatility spurred by tariff concerns led to increased investor caution, particularly after recent signals from the U.S. indicating a potential re-imposition or escalation of trade tariffs on key sectors such as technology and manufacturing," said Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India.

Debt fund category

On the fixed-income side, debt mutual funds saw net outflows of Rs 2.03 lakh crore in March against net outflows of Rs 6,525.56 crore in February.

The outflows from debt funds in March were driven by increased corporate redemptions to meet quarter and financial year-end advance tax obligations.

Category-wise, short-term liquid funds saw the highest net outflows at Rs 1,33,034.04 crore, followed by net selling of Rs 30,015.80 crore in the Overnight Fund category. Notably, all the debt fund categories saw outflows during March.

"Selling in debt at shorter end is mostly on account of advance tax and year end considerations. At long end, investors seem to have booked profits after recent rally in long dated bond," said Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal AMC.

Gold Funds

After 10 consecutive months of net inflows, Gold ETFs witnessed a sharp reversal in March, recording net outflows of Rs 77.21 crore compared to robust inflows of Rs 1,979 crore in February.

The dip can be attributed to profit-booking by investors following a sustained rally in gold prices. Additionally, some investors opted to rebalance their portfolios by reducing exposure to gold, leading to temporary outflows from the category.

"Despite the temporary outflows in March, the overall trend for FY2025 underscores gold's enduring appeal as a hedge against market volatility and macroeconomic risks. With global uncertainties likely to persist in the near term, Gold ETFs may continue to play a key role in diversified portfolios. While short-term fluctuations driven by profit-booking and asset reallocation are expected, the long-term outlook for gold remains constructive, particularly as investors seek stability in an evolving economic landscape," said Meshram.

The Indian mutual fund industry saw net outflows of Rs 1.64 lakh crore in March on account of selling in debt mutual funds.

However, 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 1.87 percent to Rs 65.74 lakh crore in March.

A total of 30 schemes were launched in the month of March 2025 all open-ended and across categories, raising a total of Rs 4,085 crore.