The mutual fund industry witnessed a mixed trend in March, as investor concerns over Trump tariff policies impacted equity inflows. Equity mutual fund inflows declined by 14%, falling to ₹25,082 crore in March from ₹29,303 crore in February.
This drop in inflows reflects rising investor caution amid global trade uncertainties.
Despite the fall, all 11 equity mutual fund categories still saw positive inflows, showcasing continued interest in long-term wealth creation. The flexi-cap category led the pack with ₹5,615 crore in inflows, followed by smallcap funds at ₹4,092 crore and midcap funds at ₹3,438 crore.
However, one notable shift was the sharp fall in sectoral and thematic fund inflows, which plunged nearly 97% month-over-month. These funds only attracted ₹170 crore in March compared to ₹5,711 crore in February, indicating a major change in investor sentiment towards thematic investing.
The steep decline in sectoral fund interest suggests investors are moving away from riskier, theme-based bets.
Overall, the mutual fund industry saw a total inflow of ₹1.64 lakh crore in March, a significant rise from ₹40,076 crore in February. But this headline figure hides deeper concerns—debt mutual funds witnessed a heavy outflow of ₹2.02 lakh crore, reversing February’s small inflow of ₹6,525 crore.
The contrasting flows between equity and debt categories highlight market uncertainty and shifting investor strategies.
With global tensions, especially around US tariff actions, playing a role in market sentiment, investors appear to be cautiously rebalancing their portfolios. Equity mutual funds are still attracting steady investments, but the sharp fall in thematic fund flows signals a defensive turn.
As market dynamics evolve, the coming months will be critical in determining how mutual fund flows adjust to geopolitical pressures and domestic market signals.
