MUTUAL FUND FLOWS MAR-26 QUARTER – MACRO VIEW

MUTUAL FUND FLOWS MAR-26 QUARTER – MACRO VIEW

We will look at the macro picture of quarterly mutual fund flows on 3 fronts. Firstly, we look at the overall quarterly flows and AUM. Secondly, we look at the fund categories with the best net inflows in Mar-26 quarter. Thirdly we look at the fund categories with the biggest outflows in the quarter.

Data Source: AMFI

Here are the key takeaways from the above flow data.

Gross flows into open ended funds in March 2026 quarter stood at ₹43.01 Trillion while the redemptions were ₹42.90 Trillion; resulting in net inflows of just ₹0.11 Trillion.

Equity funds and passive funds dominated the quarterly flows, with passive funds having a slight edge. MAAFs, among the hybrids, was also a precious metals play.

The 5 biggest outflows were seen in debt funds, especially with concerns over rising rates, persistent FPI selling, and corporate redemption pressure in the quarter.

A quick word on the closing net AUM. As of March 2026 quarter, net AUM of Indian mutual funds stood at ₹73.49 crore; sharply lower than the previous 3 sequential quarters. This was largely on account of the sell-off in the month of March 2026.

DEBT FUND FLOWS IN MARCH 2026 QUARTER

Data Source: AMFI

Like in previous quarters, most of the action was at the short-end of the yield curve due to quarterly redemption pressure. However, corporate bond funds saw selling due to concerns over a rate hike amidst the US-Iran war. Let us turn to the positive and negative flows.

Significant inflows were not seen in any debt fund category. Net outflows were prominent in the quarter in Liquid Funds at ₹ (45,229) Crore, Corporate Bond Funds ₹ (29,068) Crore, Short Duration Funds ₹ (26,999) Crore, Ultra Short Duration Funds ₹ (20,206) Crore, and Low Duration Funds ₹ (18,120) Crore. Other outflows were also relatively significant.

Total AUM of active debt funds at the close of March 2026 stood at ₹16.52 Trillion; compared to ₹18.10 Trillion, ₹17.80 Trillion, and ₹17.58 Trillion in the last 3 sequential quarters. The pressure is clearly coming from the short end in the quarter.

EQUITY FUND FLOWS IN MARCH 2026 QUARTER

Data Source: AMFI

Net inflows into equity funds in the March 2026 quarter remained robust at ₹90,457 crore, almost at par with previous quarters. The inflows were dominated by two themes viz., allocation for diversification and alpha hunting in smaller stocks.

Flows in the March 2026 were predominantly inflows in the Mar-26 quarter. Inflows were led by Flexi-Cap Funds at ₹24,651 Crore. This was followed by Mid-Cap funds at ₹13,252 Crore, Small Cap Funds ₹13,087 Crore, Large & Mid-Cap funds ₹11,627 Crore, and Large Cap Funds at ₹7,115 Crore. Thematic fund flows have largely tapered.

Total AUM of equity funds as of March 2026 quarter stood at ₹31.98 Trillion; compared to ₹35.73 Trillion, ₹33.68 Trillion, and ₹33.47 Trillion in previous 3 sequential quarters. The sharp fall in the AUM in March 2026 quarter can be attributed to the 10% fall in March.

HYBRID FUND FLOWS IN MARCH 2026 QUARTER

Data Source: AMFI

Net flows in the quarter were again dominated by Multi-Asset Allocation Funds (MAAF), at ₹24,174 Crore; followed by Aggressive Hybrid Funds ₹4,092 Crore, Dynamic Asset Allocation Funds (BAF) ₹3,078 Crore. Heavy net selling was seen in arbitrage funds in the quarter to the tune of ₹ (17,229) crore due to redemption pressures.

Total AUM of hybrid funds (including solution funds) as of March 2026 stood at ₹10.88 Trillion; compared to ₹11.59 Trillion, ₹10.89 Trillion, and ₹10.48 Trillion in the previous 3 sequential quarters. The fall in AUM can again be attributed to the correction in the equity component of hybrid funds.

PASSIVE FUND FLOWS IN MARCH 2026 QUARTER

Data Source: AMFI

All the four passive categories saw positive flows in the quarter, with equity index ETFs and gold ETFs leading the way, followed by index funds and FOFs in that order. However, the AUM of passive funds has contracted in the March 2026 quarter, compared to the December 2025 quarter. This can be attributed to the sharp fall in markets in March 2026.

In a tough month, investors seem to have kept their faith in active equity funds and passive funds, which can be attributed to the sticky SIP route.