Mid-cap mutual funds also continued to attract significant investor interest, with inflows of Rs 3,439 crore in March compared to Rs 3,406 crore in February.
Amid stock market uncertainty due to the ongoing tariff that was started by US President Donald Trump, the net inflow of equity mutual funds (MFs) continued to decline for the third consecutive month in March 2025. According to the data released by the Association of Mutual Funds in India (AMFI), the equity-oriented mutual fund net inflows dropped 14 per cent to Rs 25,082 crore in March. This is way lower than Rs 29,303 crore in February, Rs 39,688 crore in January, and Rs 41,156 crore in December.
Within the equity fund categories, flexi cap funds recorded the highest inflows in March, attracting Rs 5,615 crore, a gain from Rs 5,104 crore in February. Small-cap funds witnessed the second-highest inflows of Rs 4,092 crore. These figures marked a slight increase from February’s Rs 3,722 crore.
Sectoral/Thematic Funds Witness Sharp Drop
However, sectoral/thematic funds saw a sharp drop in inflows to Rs 735 crore in March from Rs 5,711 crore in February. This significant decline in sectoral/thematic funds indicates a shift in investor sentiment, with interest moving away from niche sectoral bets towards more diversified and flexible investment strategies.
Mid-cap mutual funds also continued to attract significant investor interest, with inflows of Rs 3,439 crore in March compared to Rs 3,406 crore in February.
Inflows Decline In Large-Cap
In contrast, large-cap funds witnessed a decline in inflows, receiving Rs 2,479 crore in March compared to Rs 2,866 crore in February.
However, the mutual fund industry’s total assets under management (AUM) reached an all-time high of Rs 65.74 lakh crore in March – a gain of 1.87 per cent from Rs 64.53 lakh crore in the month of February,
What Does It Mean?
According to Jatinder Pal Singh, CEO, ITI Mutual Fund, continued incremental inflows were mainly seen in flexi cap, small cap and multi cap, which is a positive sign, indicating a long-term investment approach by investors despite global and macroeconomic concerns.
“The March 2025 AMFI data shows gross equity sales up by approx Rs 2,100 crore though net flows down by 14 per cent to Rs 25,000 crore from Rs 29,300 crore mainly because of higher redemption in sectorial and thematic funds. Interestingly, equity AUM grew by 7.5 per cent to Rs 29.5 lakh crore, and the overall industry AUM rose to Rs 65.74 lakh crore in March 2025,” Singh said.
Gold ETF, Debt Funds Witness Outflow
On the other hand, gold exchange-traded funds (ETFs), which witnessed a fund infusion of Rs 1,980 crore by investors in February, saw an outflow of Rs 77 crore.
Besides, debt funds continued an outflow of Rs 2.02 lakh crore in March. This was Rs 6,525 crore in February.
Overall, mutual funds experienced an outflow of Rs 1.64 lakh crore during the month under review as compared to an inflow of Rs 40,000 crore in February.
Despite the outflow, assets under management of the industry slightly increased to Rs 65.7 lakh crore in March-end from Rs 64.53 lakh crore in the preceding month.
