Retail Investors Defy Market Chaos; Equity MF Inflows Jump 56% In March, SIPs At Record-high - BW Businessworld

SIP inflows also touch a record high of nearly Rs 32,100 crore during the month

Inflows into Indian equity mutual funds rose 56 per cent month-on-month to an eight-month high of Rs 40,450 crore in March even as markets witnessed sharp volatility amid escalating tensions in the Middle East, according to data released by the Association of Mutual Funds in India (AMFI).

The surge was largely driven by sustained retail participation through systematic investment plans (SIPs). The number of contributing SIP accounts increased to 97.2 million in March, up from 94.4 million in February, reflecting continued investor confidence despite market swings.

SIP inflows also touched a record high of nearly Rs 32,100 crore during the month, underlining the resilience of disciplined, long-term investing behaviour among domestic investors.

"The mutual fund industry continues to witness steady investor participation. Equity inflows extended their 61st consecutive month of positive net inflows, reflecting sustained investor confidence in long-term wealth creation through mutual funds," said Venkat Chalasani, Chief Executive.

AUM Declines

The mutual fund industry witnessed a sequential decline in assets under management (AUM) in March 2026, reflecting market volatility during the month. According to data, the industry's net (AUM) stood at Rs 73.73 lakh crore in March, down from Rs 82.02 lakh crore in February.

"While the headline numbers for March 2026, a net outflow of Rs 2,39,910 crore and AUM declining to Rs 73.73 lakh crore from Rs 82.03 lakh crore in February, may spook investors, both are misleading in isolation. The AUM decline is a mark-to-market story driven by a sharp equity market correction during the month, not a confidence story," said Nitin Agrawal, CEO, Mutual Funds, InCred Money.

The net outflow is almost entirely driven by debt fund redemptions, which is a well-established quarter-end phenomenon in March. Equity net inflows at Rs 40,450 crore signal conviction buying, he added.

Mid- and Small-Cap Funds Attract Strong Buying Interest

Category-wise, inflows remained robust across segments. Investments into large-cap funds rose 42 per cent month-on-month to Rs 2,998 crore.

Mid-cap funds saw inflows jump to a record Rs 6,064 crore, while small-cap funds attracted Rs 6,264 crore, up 61 per cent from the previous month. Analysts attribute this to improved valuations following recent corrections in broader markets, which have renewed investor interest in these segments.

However, the strong domestic flows contrasted sharply with continued foreign selling. Foreign portfolio investors (FPIs) offloaded a record USD 12.7 billion worth of Indian equities in March, amid concerns over elevated crude oil prices and potential economic slowdown linked to the Iran conflict.

Markets Correct Sharply; Gold ETF Demand Cools

Benchmark indices reflected the broader risk-off sentiment. The Nifty 50 and BSE Sensex declined 11.3 per cent and 11.5 per cent, respectively, marking their steepest monthly fall in six years and confirming a technical correction.

The broader markets were also under pressure, with mid-cap and small-cap indices falling 10.9 per cent and 10.2 per cent, respectively.

Meanwhile, inflows into gold exchange-traded funds (ETFs), which had surged to a record Rs 24,040 crore in January, moderated sharply to Rs 2,300 crore in March, suggesting a shift back towards equities as valuations became more attractive.

"Gold ETFs cooled after three extraordinary months, while other ETFs had their best March ever at Rs 19,800 crore, driven also by institutional year-end rebalancing," said Suranjana Borthakur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers.

Borthakur also highlighted a nearly 5 times jump in Gold ETFs where it went from Rs 15,000 crore last year to Rs 74,000 crore in a single year.

Other ETFs also crossed Rs 1 lakh crore for the first time. "SIPs held firm through every bout of volatility. FY26 was not the loudest year for Indian mutual funds but it may have been the most consequential," she said.