Equity mutual fund inflows hit a 17 month high in March 2026 as AUM fell, with record SIP contributions showing resilient retail investors amid volatility

Retail flows stay resilient as MF AUM falls 10.1% MoM in March: Motilal Oswal

Equity mutual fund inflows hit a 17 month high in March 2026 despite a 10.1 percent drop in total AUM as markets corrected, SIP contributions and retail participation stayed strong

By Srabastee Biswas

Retail investor participation remained resilient in March 2026 even as mutual fund assets declined sharply amid a market correction, according to Motilal Oswal’s latest monthly tracker.

The report noted that total mutual fund AUM fell 10.1% month-on-month (MoM) to ₹73.7 trillion, dragged by declines across equity, liquid, income, ETF and balanced fund categories. Equity AUM dropped 9.3% MoM to ₹35.1 trillion, hitting an 11-month low as the Nifty declined 11.3% during the period.

Despite the fall in markets, inflows remained strong. Gross equity inflows rose 41.4% MoM to an all-time high of ₹1,024 billion, while redemptions increased 24.6% MoM to ₹539 billion. As a result, net inflows climbed to a 17-month high of ₹485 billion, compared with ₹292 billion in February.

Systematic investment plan (SIP) contributions continued to anchor flows, touching a record ₹320.9 billion, up 7.5% MoM and 23.8% year-on-year.

Motilal Oswal highlighted that sectoral allocation trends shifted during the month, with mutual funds increasing exposure to Healthcare, Technology and Utilities, while trimming positions in Private Banks and Automobiles. Healthcare allocation rose to 7.8% (+50 bps MoM), while Technology inched up to 7.3% (+40 bps MoM). Private Banks, however, saw a decline to 17.6% (-60 bps MoM), though it remained the largest sector holding.

On the institutional side, domestic investors recorded inflows of $15.4 billion, offsetting foreign outflows of $14.2 billion during the month.

The report underscores that steady retail inflows, particularly via SIPs, continue to provide stability to the market even as volatility impacts overall valuations and compresses industry AUM.

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