Price moves dominate Equity Funds AUM shift in March 2025, amid market fall

PRICE MOVES IN AUM SHIFT – THE MACRO PICTURE

Each month the assets under management of mutual funds shifts higher or lower. This shift is due to a combination of net flows and price changes. Both can either be positive or negative. In the case of March 2026, while debt funds saw heavy net outflows, it was the equity and passive funds that saw extensive price damage due to the market fall. At a macro level, the AUM of open-ended funds fell -10% to ₹73.49 trillion. In rupee terms, the total AUM of open-ended funds fell by ₹8.29 trillion. Out of this fall, only ₹2.40 trillion was due to net outflows, while ₹5.89 trillion was due to price damage.

Data Source: AMFI (absolute numbers are ₹ in crore)

WHAT TRIGGERED MUTUAL FUND AUM SHIFT IN MAR-26

• In the case of debt funds, price changes contributed less than 1% of the AUM shift, while the balance came from outflows due to quarter-end corporate pressures.

• Passive funds had the highest price dominance at 127.5%, largely because the equity indices as well as the price of gold and silver underwent a deep correction.

• In the case of equity funds, the price dominance was fairly high at 111.8%, with 9 out of 11 equity fund categories having price move dominance of more than 100%.

• In the case of hybrids, price dominance was very high at above 150% for MAAFs, which is due to their dual exposure to equities and gold. In short, while debt funds were hit by outflows, equity and gold-linked funds saw heavy price depletion.

EQUITY AUM SHIFT: HOW IT PANNED OUT IN MARCH 2026

Based on the data provided by AMFI, Active Equity Funds saw positive flows of ₹40,450 crore, but that was more than offset by price depletion. Here are the granular details.

• Active Equity funds saw net AUM depletion of ₹3.42 trillion. This was triggered by price depletion of ₹3.82 trillion, which was partially offset by net inflows into equity funds to the tune of ₹0.40 trillion. Price damage was due to market sell-off.

• Within equity funds, 9 out of 11 categories saw price dominance of over 100%, and in the remaining 2 cases, the slightly lower price dominance was due to negative flows. Small cap funds saw the maximum price damage compared to the net flows.

• Interestingly, the very themes that have driven flows like alpha hunting and diversified allocation; have been the fund categories that have also seen the maximum price depletion. This can be partially attributed to panic selling amid over ownership by traders. Also, small business models are more vulnerable.

• For now, the emerging situation in the Middle East remains a potent risk factor for equity funds as well as for funds with linkages to equity and precious metals. Even in hybrid and passive categories, the most popular funds like the MAAFs and the Equity Index ETFs have seen the maximum price dominance amidst the fall in markets.

The selling in March has been triggered by geopolitical risks and it may have been an exceptional month. A lot will depend on how the US-Iran war situation shapes up. After all, that will determine the extent of supply chain constraints for Indian companies.