Equity MFs see 8-month high inflows amid global volatility
Flexi, mid and small caps lead inflows, SIP contributions hit record high
Equity MFs see 8-month high inflows amid global volatility
Equity-oriented mutual funds witnessed a sharp surge in inflows in March, rising 56 per cent to Rs 40,450 crore from Rs 25,978 crore in February, reflecting sustained investor confidence despite market volatility and geopolitical tensions.
The inflows marked the highest level since July 2025, driven largely by strong participation in flexi-cap, mid-cap and small-cap funds. Flexi-cap funds led the category with inflows of over Rs 10,000 crore, followed by small-cap funds at Rs 6,263 crore and mid-cap funds at Rs 6,063 crore.
Retail participation remained robust, with Systematic Investment Plan (SIP) contributions hitting a record high of Rs 32,087 crore in March, up from Rs 29,845 crore in February. The steady rise in SIP inflows highlights continued long-term commitment from individual investors.
Market experts attributed the surge to a mix of sustained SIP inflows, year-end portfolio allocations and investors utilising recent market corrections as an opportunity to deploy fresh capital. Volatility triggered by geopolitical tensions, particularly in West Asia, also created attractive entry points for long-term investors.
Large-cap funds recorded inflows of Rs 2,997 crore, while sectoral and thematic funds remained stable with inflows of Rs 2,698 crore. However, dividend yield funds and Equity Linked Savings Schemes (ELSS) saw marginal outflows, likely due to profit booking and portfolio rebalancing.
Despite strong equity inflows, the overall mutual fund industry reported a net outflow of about Rs 2.4 lakh crore in March, compared to an inflow of Rs 94,530 crore in February. This was primarily due to heavy withdrawals from debt funds, which saw outflows of nearly Rs 2.95 lakh crore, particularly from liquid and overnight categories.
Hybrid schemes also witnessed outflows of Rs 16,538 crore, while arbitrage funds saw withdrawals of Rs 21,113 crore. Overall, assets under management of the mutual fund industry declined to Rs 73.73 lakh crore at the end of March from Rs 82.03 lakh crore in February.
