Equity Mf Inflows Surge 56% in March As Investors Pile Induring Volatility

MF Flows

Mumbai, April 10: Equity mutual funds saw a sharp resurgence in investor inflows in March, even as debt-oriented schemes witnessed massive outflows, highlighting a growing divergence in investor preference towards risk assets, according to data released by the Association of Mutual Funds in India.

Net inflows into equity mutual funds surged 56 percent month-on-month to Rs 40,450 crore in March, up from Rs 25,977 crore in February, signalling strong retail participation despite volatile market conditions.

The sharp increase was broad-based across categories, with flexi-cap funds leading the pack, followed by mid-cap and small-cap schemes. The sustained interest in equities suggests investors are continuing to bet on long-term growth opportunities even amid global uncertainties.

Sharp Pullback

In contrast, debt mutual funds saw a dramatic reversal, recording massive outflows of around Rs 2.94 lakh crore during the month, compared to inflows of over Rs 42,000 crore in February.

The sharp pullback was largely driven by institutional and treasury-related redemptions, a trend typically seen at the end of the financial year. Liquid and overnight funds accounted for the bulk of the outflows, indicating short-term cash management adjustments by large investors.

Hybrid funds also witnessed a reversal in trend, posting net outflows of Rs 16,538 crore in March versus inflows of nearly Rs 12,000 crore in the previous month, reflecting some cooling in appetite for balanced investment strategies.

Divergence

At the industry level, the divergence between equity inflows and debt outflows resulted in an overall net outflow of around Rs 2.39 lakh crore in March, compared with net inflows of Rs 94,543 crore in February.

Despite the outflows, systematic investment plan (SIP) inflows remained resilient, hitting a record high of over Rs 32,000 crore during the month, underscoring continued retail commitment to disciplined investing.

Assets under management (AUM) also declined during the month, primarily due to market volatility and the large-scale debt outflows. Equity AUM fell as markets corrected, while debt AUM dropped sharply in line with redemptions.

Clear shift

The data highlights a clear shift in investor behaviour. While institutional money moved out of debt funds, retail investors continued to channel money into equities, particularly through SIPs and diversified fund categories.

Overall, the March data paints a tale of two markets—steady and rising confidence in equities driven by retail investors, and sharp, likely cyclical outflows from debt funds led by institutional activity. The persistence of strong equity inflows, even amid volatility, suggests that domestic investors remain committed to long-term wealth creation through market-linked instruments.

Source: https://portal.amfiindia.com/spages/ammar2026repo.pdf