Equity MF inflows fall 5%;sharp spike in debt plans

Equity funds recorded net inflows of Rs 38,440 crore, marking a 5% drop from inflows in March. The highest drop of 27.8% was seen in net inflows of sectoral and thematic funds while large and mid cap schemes saw a drop in their net inflows of 15.8% and 18.2%, respectively.

Monthly contributions through SIPs (Systematic Investment Plans) declined to Rs 31,115 crore from Rs 32,087 crore in March, according to the data. The overall assets under management of the mutual fund industry rose 11.2%, following the ceasefire in West Asia, to reach Rs 81.92 lakh crore in April 2026.

Nehal Meshram, senior analyst, Morningstar Investment Research India said that the inflows in April were largely driven by normalisation of quarter-end liquidity conditions with redeployment of cash by institutional and corporate investors.

She added that liquid and money market funds being at the centre of net outflows in March and subsequent inflows in April (over 75%) shows that investors are anchored at the short end of the curve, with liquidity management and capital preservation continuing to dominate asset-allocation decisions.

Vaibhav Chugh, CEO, Abakkus Mutual Fund believes that the lower inflows in sectoral and thematic funds indicates a shift towards greater selectivity and a preference for long-term oriented opportunities with clearer asset allocation among investors.

Meanwhile, inflows into categories like mid and small cap schemes rose by 8% and 9.9% respectively while multi cap schemes saw a 27.7% rise in their monthly net inflows. This was on the back of a strong rally in mid and small cap stocks.

The BSE benchmarks of mid and small cap stocks rose by 13.81% and 19.61%, respectively during the month. Flexi cap schemes also saw a marginal increase in their net inflows while maintaining the top position among equity fund categories with the highest net inflows.

Suranjana Borthakur, head of distribution, Mirae Asset Investment Managers (India) said that flexi cap funds are increasingly becoming a core allocation choice for investors looking for participation across market segments.

He emphasized that the slight moderation in SIP inflows should not be seen as a slowdown, especially after the previous month’s higher numbers due to spillover inflows (some of the SIPs scheduled during month end in February got forwarded to March due to a smaller number of days in February).

She added that maintaining SIP inflows at around the Rs 31,000 crore mark reflects the steady participation of retail investors in mutual funds. After decrease in net inflows for two successive months, gold ETFs bounced back sharply with a 34% rise in their net inflows from Rs 2,266 crore to Rs 3,040 crore in April.

Meshram said that this rise reflects steady, incremental demand rather than any sharp rise in risk aversion. She added that with fiscal year-end adjustments behind, investors likely resumed measured allocations to gold as a diversification tool amid ongoing global and macro uncertainty while adding that some inflows may also have been due to gold’s continued strength as a hedge against volatility and geopolitical risks.

Among other passive categories, index funds saw a sharp drop in their net inflows by 43% due to high net outflows in debt-oriented index funds. Equity-oriented index funds, meanwhile, saw a sharp rise in their net inflows of close to 60% from Rs 6,415 crore in March to Rs 10,218 crore in April. Equity-oriented ETFs recorded a sharp decline after strong inflows in March.

Navneet Munot, MD and CEO, HDFC AMC said that the overall numbers in April shows commendable resilience by Indian investors against the backdrop of a challenging global environment. He further added that strong equity flows reflect the growing maturity of investor base and the deepening awareness about the merits of systematic investing.

“While markets will always have to contend with geopolitical developments, the data suggests that long-term financial goals are increasingly guiding investment decisions over short-term noise,” Munot added.

A Balasubramaniam, MD and CEO, Aditya Birla Sun Life AMC said that the investors increasingly preferring diversified allocation strategies indicates a balanced approach towards wealth creation, with investors focusing on asset allocation, stability and long-term goal-based investing amid global uncertainty.