The Indian domestic mutual fund industry concluded FY26 with assets under management (AUM) increasing by 12.2% to Rs 73.73 lakh crore. This growth added Rs 8 lakh crore to its asset base over the year, with sustained equity market volatility impacting overall expansion, as per the latest data from the Association of Mutual Funds in India (AMFI). March data indicated a significant rise in equity fund investments despite geopolitical tensions. Actively managed equity mutual funds saw inflows of Rs 40,450.26 crore in the month, the highest since July 2025, up from Rs 25,977.81 crore in February.
SIP contributions reached a record high of Rs 32,087 crore in March, compared to Rs 29,845 crore the previous month, highlighting continued retail investor engagement even amidst market uncertainties. Analysts linked the surge in equity inflows to year-end portfolio adjustments, strategic capital deployment during recent market corrections, and the perception of improved valuations following a selloff linked to West Asia. However, the mutual fund industry as a whole experienced net outflows of Rs 2.39 lakh crore in March, contrasting with net inflows of Rs 94,530 crore in February. Debt mutual funds witnessed outflows of Rs 2.94 lakh crore in March.
Gold ETF inflows nearly halved to Rs 2,266 crore in March from Rs 5,254.95 crore in February. Among equity categories, flexi-cap funds led inflows at Rs 10,054.12 crore, up from Rs 6,924.65 crore in February. Small-cap and mid-cap funds attracted Rs 6,263.56 crore and Rs 6,063.53 crore, respectively, compared to Rs 3,881.06 crore and Rs 4,002.99 crore in the previous month, while large-cap funds drew Rs 2,997.84 crore. The AUM growth was notably lower compared to the nearly 23% growth in FY25 and the 36% surge in FY24.
Throughout the year, market fluctuations were influenced by factors such as elevated valuations, subdued corporate earnings, geopolitical tensions, including trade-related concerns, ongoing foreign institutional investor (FII) selling, and the absence of AI-linked investment flows. Recent selling pressure intensified following the US-Iran-Israel conflict, leading to higher crude oil prices and raising concerns about India’s fiscal outlook.
