The moderation in March follows a sharp 26 per cent sequential decline in February, the steepest monthly drop since April 2023, as heightened volatility dampened sentiment

Flows into India’s equity mutual funds moderated to 11-month low in March, falling sequentially for the third straight month, hurt by lower inflows into sectoral and thematic funds.

Net inflows into equity mutual funds fell 14.4 per cent month-on-month in March to approximately ₹29,200 crore , the Association of Mutual Funds in India’s (AMFI) data showed on Friday.

The moderation in March follows a sharp 26 per cent sequential decline in February, the steepest monthly drop since April 2023, as heightened volatility dampened sentiment.

Flows into mutual funds that focus on particular sectors or themes, which were the top performers in fiscal year 2025, declined 97 per cent year-on-year in March after a 37 per cent fall in February.

AMFI attributed the drop to temporary caution due to market volatility triggered by tariff concerns.

Large-cap funds saw a marginal drop in inflows to ₹2,479 crore in the reported month, while mid- and small-cap funds grew 0.2 per cent and 10 per cent, garnering ₹3,415 crore and ₹4,092 crore, respectively.

The segments had confirmed a technical bear market in February.

“Some investors are capitalising on deep-value opportunities in the small- and mid-cap segments, while others are opting for the relative stability of large-cap stocks,” said Devang Kabra, Partner and Co-Fund Manager at Wallfort PMS.

While inflows moderated, mutual fund investors bought India’s equity mutual funds for the 49th straight month.

Analysts expect the positive momentum to return as the recent drop offered attractive opportunities for investors and on India’s perceived well-positioning compared to emerging markets peers amid the ongoing global trade adjustments.

The benchmark Nifty 50 index rose 6.3 per cent in March, ending its longest monthly losing streak in nearly 30 years. The small-cap and mid-cap indexes gained 9.5 per cent and 7.8 per cent, respectively.

Contributions via Systematic Investment Plans (SIPs) decreased 0.3 per cent to ₹25,926 crore in March, while the number of new SIP accounts fell to 81.1 million from February’s 82.6 million.

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Published on April 11, 2025