India’s mutual fund industry witnessed a 10.10 per cent month-on-month decline in assets under management (AUM) in March, with total AUM falling to Rs 73.73 lakh crore from Rs 82.02 lakh crore in February, primarily due to heavy outflows from debt and arbitrage funds.
According to data from Association of Mutual Funds in India, the contraction was driven by significant redemptions in debt schemes, which saw outflows of Rs 2.94 lakh crore, largely attributed to quarter-end treasury adjustments and profit booking by institutional investors. Arbitrage funds also recorded outflows of Rs 21,113.70 crore during the month.
Despite the decline in overall AUM, equity mutual funds demonstrated resilience, attracting inflows of Rs 40,450 crore even as markets remained volatile amid the ongoing West Asia conflict. Investors continued to deploy capital into flexi-cap, mid-cap and small-cap funds, reflecting confidence in long-term growth prospects.
Flexi-cap funds led the inflow chart with Rs 10,054.12 crore, while mid-cap and small-cap categories each garnered over Rs 6,000 crore. Analysts noted that investors are increasingly using market corrections as buying opportunities in these segments.
Flows into gold exchange-traded funds (ETFs) moderated to Rs 2,265.68 crore in March from Rs 5,254 crore in February, while silver ETFs witnessed outflows of Rs 683 crore.
Systematic investment plan (SIP) contributions remained strong, rising to Rs 32,087 crore from Rs 29,845 crore in the previous month, with nearly 9.72 crore contributing accounts, underscoring the growing preference for disciplined investing among retail investors.
Analysts say that the March data reflects a tactical reallocation of assets rather than a sentiment-driven exit from markets. Similarly, Nitin Agrawal attributed the AUM decline largely to mark-to-market losses stemming from equity market corrections, rather than a deterioration in investor confidence.
On a year-on-year basis, the industry’s AUM rose 12.15 per cent from Rs 65.74 lakh crore in March 2025, indicating continued long-term growth despite short-term fluctuations.