Hybrid mutual fund schemes attracted inflows of Rs 1.55 lakh crore in 2025–26, marking a 29 per cent increase over the previous financial year, as investors turned to diversified investment strategies to navigate volatile market conditions.
According to data from the Association of Mutual Funds in India, the number of hybrid fund folios rose to 1.9 crore in March 2026 from 1.56 crore a year earlier, reflecting the addition of 34 lakh investor accounts.
Assets under management (AUM) of hybrid schemes also expanded to Rs 10.35 lakh crore from Rs 8.83 lakh crore in March 2025, registering a growth of 17 per cent, indicating sustained investor interest in asset allocation-led investing.
Market participants attributed the strong inflows to heightened global uncertainty, including geopolitical tensions in West Asia, the Russia–Ukraine conflict and trade-related concerns linked to policies under Donald Trump, which contributed to volatility in equity markets.
Multi-asset allocation funds emerged as a key driver within the hybrid category, while arbitrage funds also saw strong demand owing to their low-risk profile and tax efficiency. Varun Gupta of Groww Mutual Fund highlighted that AUM growth in multi-asset funds exceeded 65 per cent between April 2025 and April 2026, significantly outpacing the broader hybrid segment.
Despite an increase in product launches, with 17 new hybrid fund offers (NFOs) introduced during FY26 compared to 12 in FY25, investor participation in new schemes remained relatively subdued. Total inflows from NFOs declined to around Rs 4,106 crore from nearly Rs 4,792 crore in the previous year, suggesting a preference for established funds with proven track records.
Industry experts expect investor interest in hybrid funds to remain firm in the current financial year, supported by continued market volatility and the need for balanced, risk-managed investment approaches.