Equity-oriented mutual funds experienced a significant 17.38% year-on-year increase in average assets under management in March. This growth was primarily driven by substantial inflows into flexi Cap, mid Cap, and thematic funds, according to a report by Abakkus Mutual Fund. Flexi Cap Funds emerged as the largest and fastest-growing category, with average net AUM reaching around Rs. 5.28 lakh crore, marking a 25.10% year-on-year growth compared to the previous year.
The total average net AUM of equity-oriented schemes rose to approximately Rs. 33.54 lakh crore in March 2026 from about Rs. 28.57 lakh crore a year earlier. This increase reflects sustained retail participation and resilience in equity markets despite occasional volatility, as highlighted in the report. The strong expansion of flexi cap funds underscores investors’ preference for a dynamic equity allocation strategy that provides fund managers with the flexibility to navigate various market capitalizations, sectors, and styles in a changing macro-economic environment.
The mutual fund industry exhibited broad-based gains, with mid cap funds growing by 22.74% to about Rs. 4.38 lakh crore, small cap funds rising by 20.33% to Rs. 3.47 lakh crore, and Large & Mid Cap Funds surging by 23.39% to Rs. 3.14 lakh crore. Sectoral or Thematic Funds, with an average net AUM of approximately Rs. 5.01 lakh crore, remained among the largest categories, although their share slightly decreased to 14.93% from 15.52% in March, indicating a slight cooling in concentrated thematic allocations.
“Flexi Cap 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,” said Vaibhav Chugh, CEO of Abakkus Mutual Fund. Meanwhile, sustained flows into Mid and Small Cap funds suggest a strong appetite for alpha generation opportunities, according to Chugh. In contrast, the relatively modest growth in Large Cap Funds and ELSS categories points to a clear shift in investor priorities towards more flexible, performance-oriented investment strategies.
