Equity Mutual Fund Inflows Dip 14% In March Amid Market Uncertainty

Sectoral and thematic funds saw a steep decline in interest, managing to attract just Rs 735 crore, a sharp fall from Rs 5,711 crore in February, suggesting a broader investor shift

On the commodities front, gold exchange-traded funds (ETFs) saw a reversal in trend, recording an outflow of Rs 77 crore in March

Source : Freepik

Investor contributions to equity mutual funds slowed for the third month in a row, falling 14 per cent to Rs 25,082 crore in March as market volatility persisted. Despite the decline, equity schemes continued to register net inflows for the 49th consecutive month, according to data released by the Association of Mutual Funds in India (AMFI) on Friday.

March's inflow figure was notably lower than the Rs 29,303 crore recorded in February and a sharp drop from the Rs 41,156 crore seen in December.

Among equity fund categories, flexi cap funds drew the highest investments in March, with Rs 5,165 crore in inflows. In contrast, sectoral and thematic funds saw a steep decline in interest, managing to attract just Rs 735 crore, a sharp fall from Rs 5,711 crore in February, suggesting a broader investor shift away from concentrated sector plays in favor of diversified strategies.

Mid- and small-cap funds continued to see robust demand, with inflows rising slightly to Rs 3,439 crore and Rs 4,092 crore, respectively. Meanwhile, large-cap funds saw a dip, pulling in Rs 2,479 crore compared to Rs 2,866 crore a month earlier.

On the commodities front, gold exchange-traded funds (ETFs) saw a reversal in trend, recording an outflow of Rs 77 crore in March following an impressive Rs 1,980 crore inflow in the month of February.

Mutual Funds Industry 

Debt-oriented schemes, meanwhile, posted significant outflows of Rs 2.02 lakh crore—up from Rs 6,525 crore in February—dragging the overall mutual fund industry into negative territory with a net outflow of Rs 1.64 lakh crore for the month. This contrasts with net inflows of Rs 40,000 crore in February.

Despite the pullback in flows, the industry's total assets under management (AUM) inched up to Rs 65.7 lakh crore at the end of March, from Rs 64.53 lakh crore in February.