Equity mutual fund inflows hit 8-month high in March

In March, the benchmark Sensex index fell by over 11% as the conflict in West Asia and the resultant high crude oil prices soured investor sentiment. “While the headline numbers for March 2026, a net outflow of Rs 2,39,910 crore and AUM declining…may spook investors, both are misleading in isolation. The AUM decline is a mark-to-market story driven by a sharp equity market correction during the month, not a confidence story. The net outflow is almost entirely driven by debt fund redemptions, which is a well-established quarter-end phenomenon in March,” said Nitin Agrawal, CEO of mutual funds at InCred Money. “Flexi Cap gains the spotlight as the top segment for inflows, reinforcing the importance of diversification across market caps when volatility is elevated. Mid Cap and Small Cap also witnessed sharp acceleration despite meaningful drawdowns, signalling that value buying opportunities are emerging in these segments,” said Agrawal.

Flows into gold and silver exchange-traded funds (ETFs) remained lukewarm after record highs in January, when they had stolen the spotlight from equity funds. Gold ETFs saw inflows of Rs 2,266 crore in March, down from Rs 5,255 crore in February and the peak of Rs 24,040 crore in January. Outflows in silver ETFs declined to Rs 684 crore from Rs 826 crore a month ago.

“Moderation in Gold ETF flows points to a renewed optimism around equities,” according to Agrawal of InCred.

However, flows into other ETFs quadrupled to Rs 19,802 crore. Index funds saw inflows nearly tripling to Rs 8,169 crore. Investors are now cyclically shifting to equity ETFs, said Kunal Rambhia, fund manager and trading strategist at The Streets.