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16 Apr 2026
Synopsis
Equity-oriented mutual funds saw a 17.38% year-on-year growth in average net assets under management in March 2026, driven by strong investor confidence. Flexi cap funds emerged as the largest and fastest-growing category, with average net AUM rising 25.10% to Rs 5.28 lakh crore.
Equity-oriented mutual funds witnessed a robust 17.38% year-on-year growth in average net assets under management (AAUM) in March 2026, underscoring sustained investor confidence and a clear shift in allocation preferences, according to an analysis by Abakkus Mutual Fund based on AMFI data.
The analysis by the fund house showed that flexi cap funds emerged as the largest and fastest-growing category within equity-oriented schemes, with average net AUM rising sharply to Rs 5.28 lakh crore in March 2026, compared to Rs 4.22 lakh crore a year back, registering a 25.10% year-on-year growth.
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“The steady expansion in equity AAUM reflects the growing maturity of Indian investors, who are increasingly adopting a long-term investment approach despite market volatility. A key highlight in March 2026 has been the strong and sustained growth of Flexi Cap Funds, which continue to attract flows given their ability to dynamically allocate across market capitalizations and across sectors,” said Vaibhav Chugh, CEO, Abakkus Mutual Fund.
These funds offer agility, which is much needed in today’s dynamic market conditions, a flexibility that has resonated well with investors navigating today’s evolving macro environment, Chugh further said.
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The total average net AUM of equity-oriented schemes rose to Rs 33.54 lakh crore in March 2026, up from Rs 28.57 lakh crore in March 2025, reflecting continued retail participation and resilience in equity markets despite intermittent volatility.
The category now commands a 15.75% share of total equity AAUM, up from 14.77% a year ago, making it the single largest contributor to the equity mutual fund universe. This strong expansion highlights a clear investor preference for dynamic equity allocation strategy which offers fund managers the flexibility to navigate across market capitalizations, sectors and styles in an evolving macro-economic environment.
Broad-based growth across categories
Beyond Flexi Cap Fund, the equity mutual fund landscape witnessed broad-based growth across most categories, with Mid Cap Funds, Sectoral/Thematic Funds, and Large Cap Funds continuing to hold significant shares in overall AAUM.
The sectoral/thematic funds remained among the largest categories with an average net AUM of Rs 5.01 lakh crore, though their share moderated slightly to 14.93% from 15.52% in March25, indicating some cooling in concentrated thematic allocations.
Mid Cap Funds saw their average net AUM rise to Rs 4.38 lakh crore, reflecting a strong 22.74% growth, with their share increasing to 13.05%, reinforcing continued investor appetite for high-growth opportunities.
The large Cap Funds, while still sizable at Rs 3.87 lakh crore, saw their relative share decline to 11.55% from 12.21%, pointing to a gradual shift away from traditional defensive allocations.
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According to the analysis, small cap funds also recorded healthy growth, with average net AUM reaching Rs 3.47 lakh crore, up 20.33% year-on-year, and accounting for 10.35% of total equity AUM. Large & Mid Cap Funds grew to Rs 3.14 lakh crore, registering a 23.39% increase, maintaining a steady presence with a 9.37% share.
Some categories witnessed relatively slower growth or declining share, reflecting evolving investor priorities. The ELSS (Equity Linked Savings Scheme ) saw marginal growth of 1.99%, with average net AUM at Rs 2.30 lakh crore, and their share declining to 6.85%.
Value/Contra Funds stood at Rs 2.04 lakh crore, growing 14.20%, with a stable share of 6.08%, indicating consistent but measured investor interest. Multi Cap Funds recorded an average net AUM of Rs 2.10 lakh crore, up 24.14%, taking their contribution to overall net AAUM of equity schemes to 6.27%, slightly higher than the last year, suggesting investors preference for the mandated allocation structures.
Focused Funds reached Rs 1.64 lakh crore, growing 16.99%, with a 4.88% share, reflecting selective investor participation. And lastly, dividend yield funds remained the smallest category with an average net AUM of Rs 30,604 crore, contributing less than 1% (0.91%) to total equity AAUM.
Chugh said, “At the same time, sustained flows into Mid and Small Cap funds indicate a strong appetite for alpha generation opportunities. In contrast, the relative modest growth in Large Cap Funds and ELSS categories highlights a clear shift in investor priorities towards more flexible, performance-oriented investment strategies.”
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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