Equity MF Inflows Fall 40% From July 2025 Peak Amid Market Consolidation

The inflows in equity mutual funds have piped down to ₹24,028 crore, registering a dip of almost 40% from a record ₹42,702 crore raised in July 2025, as investors have become wary following months of range-bound markets, as per the data provided by asset management companies.

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Moderation in inflows has, therefore, been observed, which continued despite the participation of retail investors through systematic investment plans. Participants in the markets attributed the moderation in inflows to lower equity new fund offers, volatility, and the delay in the recovery of returns.

Slower Equity Inflows Linked To Volatility And Fewer NFOs

Vaibhav Chugh, chief executive officer of Abakkus Mutual Fund, said the moderation in equity mutual fund inflows in January was expected given the environment investors have faced over the past several months. He attributed the slowdown to persistent volatility, including uncertainty around tariff-related issues, as per his statement.

Aashish P Somaiyaa, chief executive officer of WhiteOak Capital AMC, said extended periods of flat market performance tend to affect investor sentiment and flows. He noted that such phases are a regular feature of market cycles, according to comments shared by the fund house.

Shweta Rajani of Anand Rathi Wealth said part of the moderation was driven by near-term uncertainty around key events such as the Union Budget. She also highlighted a sharp reduction in equity new fund offers compared with earlier months, contributing to lower inflows.

Gold ETF Inflows Rise Sharply In January

Alongside the moderation in equity inflows, allocations to gold increased significantly. Gold exchange-traded fund inflows rose to ₹24,040 crore in January 2026 from ₹1,256 crore in July 2025, bringing gold inflows close to equity mutual fund inflows for the month, according to industry data.

Sachin Jain, managing partner at Scripbox, said gold allocations are being used primarily as a diversification tool. He noted that precious metals typically form a limited portion of portfolios, based on his statement.
Somaiyaa said the higher interest in gold has coincided with a broader move toward multi-asset allocation strategies, reflecting diversification preferences rather than reduced exposure to equities.

SIP Contributions Remain Stable

Systematic investment plan contributions remained steady during the period, rising from around ₹28,000 crore in July and August 2025 to over ₹31,000 crore in December 2025 and January 2026, according to mutual fund industry data.

Jain said a monthly SIP book of about ₹31,000 crore continues to support net inflows for an industry with assets under management of around ₹81 lakh crore. Shweta Rajani of Anand Rathi Wealth added that equity continues to play a central role in long-term portfolios, with gold and other assets used mainly for diversification.

The stability of SIPs, lower lump-sum investments in equities, and the rise in gold investments indicate that the portfolios are undergoing consolidation. Also, simultaneously, investments in equities through the route of long-term investment have shown no signs of declining.