Mutual Fund Flows in the September 2026 Quarter

MUTUAL FUND FLOWS SEP-26 QUARTER – BIG PICTURE

To begin with, we capture the big picture of quarterly mutual fund flows on 3 parameters. Firstly, we look at the overall quarterly flows (gross and net) as well as the AUM. Secondly, we look at the fund categories with the most robust net inflows in Sep-26 quarter. Thirdly we look at the fund categories with biggest outflows in the quarter.

Here are the key takeaways from the above flows data.

Gross flows into open ended funds in September 2026 quarter was higher at ₹45.32 Trillion while redemptions were also higher at ₹43.86 Trillion; resulting in net inflows of ₹1.46 Trillion.

For the Sep-26 quarter, positive net flows were dominated by active and passive equity fund category categories, with liquid funds being the sole exception.

The 5 biggest outflows were across active and passive debt funds; with funds at the short end of the curve and also at the long end of the yield curve.

A quick word on the closing net AUM. As of September 2026 quarter, net AUM of Indian mutual funds stood at ₹82.49 trillion; almost at the same level as at the close of the June quarter. Equity inflows were offset by debt outflows and by equity index correction.

DEBT FUND FLOWS IN SEPTEMBER 2026 QUARTER

The selling was predominant in debt funds, with liquid funds being a rare exception seeing net inflows in the month. The volatility in the call money rates due to liquidity surplus and the rising bond yields at the long yield led to bond fund selling. This was seen at the long and short end. For the quarter overall, debt funds saw marginal amount of net selling.

Inflows were seen in few debt fund categories. Net inflows were prominent in Liquid Funds ₹43,257 crore, Overnight Funds ₹2,477 crore, and Sectoral Funds ₹692 crore. Net outflows were prominent in the quarter in Money Market Funds at ₹ (17,931) Crore, Corporate Bond Funds ₹ (8,621) Crore, Ultra Short-Term Funds ₹ (8,113) Crore, Short Term Funds (4,660) crore, and Banking & PSU Funds ₹ (4,152) Crore. Other outflows were marginal.

Total AUM of active debt funds at the close of September 2026 stood at ₹17.64 Trillion; compared to ₹17.38 Trillion, ₹16.52 Trillion, and ₹18.10 Trillion in the last 3 sequential quarters. The October rate hike was expected and more rate hikes are likely, which had kept investors cautious about longer term funds amid higher duration risk.

EQUITY FUND FLOWS IN SEPTEMBER 2026 QUARTER

Net inflows into equity funds in the September 2026 quarter were robust at ₹92,333 crore, almost at par in last 3 quarters. The inflows were, once again, dominated by two themes viz. alpha hunting, followed market cap diversification.

Flows into active equity funds were predominantly inflows in the Sep-26 quarter. Inflows were led by Small Cap Funds at ₹24,779 Crore; followed by Mid-Cap funds at ₹21,017 Crore, Flexi-Cap Funds ₹16,470 Crore, Large & Mid-Cap funds ₹11,569 Crore, and Multi-Cap Funds at ₹10,820 crore. Thematic and sectoral fund flows have fallen sharply.

Total AUM of equity funds as of September 2026 quarter was flat at ₹37.54 Trillion; compared to ₹37.34 Trillion, ₹31.98 Trillion, and ₹35.73 Trillion in previous 3 sequential quarters. The strong flows into active equity funds were largely offset by the correction in the markets amid heavy FPI selling in Indian stocks.

HYBRID FUND FLOWS IN SEPTEMBER 2026 QUARTER

Hybrid funds include Solution Funds and Life Cycle Funds also. Net flows in the quarter were dominated by Multi-Asset Allocation Funds at ₹11,091 Crore, followed by Arbitrage Funds at ₹6,335 Crore, Aggressive Hybrid Funds ₹5,019 Crore, and Balanced Hybrid Funds ₹2,304 Crore. BAFs and Equity Savings Fund were among the hybrids to see net selling.

Total AUM of hybrid funds as of September 2026 stood at ₹12.12 Trillion; compared to ₹12.03 Trillion, ₹10.88 Trillion, and ₹11.59 Trillion in the previous 3 sequential quarters. Once again, the positive flows into hybrid funds were offset by the sustained volatility in equity, debt, and precious metal markets.

PASSIVE FUND FLOWS IN SEPTEMBER 2026 QUARTER

AMFI has now expanded the classification of passive funds into 3 categories viz. index funds, index ETFs, and International FOFs. Index ETFs as a whole saw net inflows but debt index funds led to net outflows from index funds. Equity Index ETFs and Equity Index Funds saw combined net inflows of ₹31,541 crore. On the other hand, Debt Index Funds and Debt Index ETFs saw net selling of ₹(9,257) crore.

Among precious metals; Gold ETFs saw net inflows of ₹8,606 crore, while Silver ETFs saw net inflows of ₹4,530 crore in the September quarter. This is substantially lower than the flows seen in the March and June quarters. Passive fund AUM trended lower in the September quarter, largely due to debt index selling and equity index price depletion.