Mutual Fund Industry Sees First Monthly Drop Since November; Equity Schemes Record Net Inflows

The mutual fund industry saw a 3.9% month-on-month drop in collections through systematic investment plans in February – from Rs 31,002 crore to Rs 29,845 crore. This was the first monthly drop since November. The contributing SIP accounts have also seen a decline of about 4.8 million from 99.2 million to 94.4 million. Interestingly, inflows into gold exchange-traded funds, which was at a record high net in January, was subdued at Rs 5,255 crore – down 78%. Silver ETFs registered outflows of Rs 826 crore — the first time since November 2023. Venkat Chalasani, Chief Executive, AMFI explained, “The marginal moderation compared to recent months is primarily due to February being a shorter month, with some end-of-month SIP instalments typically getting processed in early March.” The net assets under management of the industry have increased by 1.25% from Rs 81.01 lakh crore to Rs 82.03 lakh crore in February. Overall, equity schemes recorded net inflows of Rs 25,978 crore in the month, upby 8.1% from Rs 24,029 crore in January. Mid and small caps saw high investor participation during the month. While net inflows in mid cap schemes increased from Rs 3,185 crore to Rs 4,003 crore, small cap scheme saw a rise from Rs 2,942 crore to Rs 3,881 crore on a MoM basis. Sectoral and thematic funds also registered a sharp increase in inflows from Rs. 1,043 crore to Rs. 2,987 crore in February. Ovas Bakshi, head, retail sales, Kotak Mahindra AMC said that strong equity flows suggest continued retail investor confidence in the markets with strong inflows in mid, small and large cap reflecting sustained investor appetite for growth-oriented segments. He added that strong inflows in sectoral and thematic funds indicate that investors are taking tactical positions in specific themes. Akhil Chaturvedi, Chief Business Officer, Motilal Oswal AMC added that the monthly numbers show that net sales momentum in mutual funds remained healthy with mid and small cap funds seeing continued investor interest. In hybrid category, multi asset allocation schemes have continued to see high net inflows of Rs 8,476 crore. Arbitrage funds have seen a substantial decline in their net inflows Rs 592 crore in February. Debt schemes have seen a substantial decline in their net inflows mostly due to decline in net inflows in overnight schemes from Rs. 46,280 crore net inflows in January to net outflows of Rs. 14,006 crore in February. Liquid funds have seen the highest increase in net inflows in the category from Rs. 30,681 crore in January 2026 to Rs. 59,077 crore in February 2026. Vaibhav Chugh, CEO, Abakkus Mutual Fund said, “Though the markets have been volatile because of geo-political situation, the investors have become more aware about valuation corrections and thus small and mid caps continue to attract flows.” He added that the decline in inflows in gold ETFs may indicate some money is rotating back to equities because of equity price corrections. Despite February having fewer days which slightly impacted the SIP, the underlying sentiment remains robust with folio growth.