Equity Mutual Fund Flows Face Minor Hit Amid Geopolitical and Tariff Concerns
Despite elevated global uncertainty, including heightened concerns around retaliatory tariffs, equity mutual fund flows in India demonstrated notable resilience in March. According to data released by the Association of Mutual Funds in India (AMFI) on April 11, net inflows into equity mutual funds came in at Rs 25,082.01 crore, marking a 14 percent decline from February. However, this dip is seen in the context of a high base and global investor anxiety over the US administration’s protectionist policy moves, particularly surrounding reciprocal tariff threats that were making waves in international markets.
The market, however, took a more bullish view. Equity benchmarks such as the BSE Sensex and the Nifty 50 climbed almost 6 percent each during the month, bolstered by strong domestic inflows, upbeat economic indicators, and a resilient corporate earnings outlook. The minor fall in mutual fund inflows is being attributed not to domestic weaknesses but to short-term volatility created by unpredictable external forces.
Highlights:
Net inflows into equity mutual funds stood at Rs 25,082.01 crore in March.
This marks a 14% drop from February levels, largely due to external geopolitical uncertainties.
Benchmark indices Sensex and Nifty gained nearly 6% during the same period.
SIP Contributions Remain Stable, Dropping Only Marginally from February Levels
One of the most encouraging metrics in the AMFI report was the steadiness of Systematic Investment Plan (SIP) inflows, which recorded a minor month-on-month dip. March saw SIP contributions of Rs 25,926 crore, only marginally lower than the Rs 25,999 crore recorded in February. This resilience, despite a backdrop of global economic jitters and regional market fluctuations, reflects the enduring strength and discipline of India’s retail investor base.
Although March’s figure represents a four-month low, the small magnitude of the fall indicates that Indian retail investors are increasingly aligning with long-term wealth creation strategies. SIPs, which are inherently designed to weather market volatility, continue to attract capital as investors look for systematic exposure to equities without timing the market.
Highlights:
SIP inflows in March were recorded at Rs 25,926 crore.
This was only slightly down from Rs 25,999 crore in February.
It marks a four-month low, but shows retail investor commitment remains intact.
Surge in Mutual Fund Company Stocks Reflects Strong Market Sentiment
Following the release of AMFI’s data, stocks of several asset management companies (AMCs) witnessed sharp upward momentum on April 11. Shares of Nippon Life India Asset Management soared over 5 percent to Rs 555, while HDFC AMC also rallied nearly 5 percent to Rs 3,976. Aditya Birla Sun Life AMC followed suit, climbing more than 2 percent to Rs 634.
The rally wasn’t restricted to these large AMCs. Motilal Oswal Financial Services gained over 3 percent, trading at Rs 594, and Angel One rose by more than 2 percent to Rs 2,275. These stock price movements signal a broader market recognition of the underlying strength in domestic fund flows, particularly through SIPs, which provide long-term revenue visibility to AMCs.
However, not all players participated in the uptrend. UTI AMC bucked the trend, with its stock trading marginally in the red. Analysts attribute this to firm-specific factors rather than sectoral weakness.
Highlights:
Nippon Life AMC, HDFC AMC, and ABSL AMC shares rose up to 5% on April 11.
Motilal Oswal Financial Services and Angel One also gained over 2%.
UTI AMC underperformed, trading in the red due to stock-specific concerns.
SIP Stoppage Ratio Improves Slightly But Remains at Elevated Levels
While overall SIP inflows remained healthy, AMFI data revealed a nuanced picture beneath the surface. The number of SIP accounts discontinued in March stood at 51 lakh, a reduction from the 55 lakh stoppages recorded in February. However, new SIP registrations also fell during the month—from 45 lakh in February to 40 lakh in March—raising concerns about a potential slowdown in retail investor enthusiasm.
Of particular concern is the SIP stoppage ratio, which measures the number of SIPs discontinued relative to new additions. This ratio touched a record high of 122 percent in February, suggesting that more SIPs were being closed than opened. Although this ratio may have improved slightly in March, the persistently high levels underscore a potential issue in sustaining investor engagement, particularly among new or first-time retail participants.
Highlights:
SIP stoppages in March stood at 51 lakh, down from 55 lakh in February.
New SIPs dropped to 40 lakh in March from 45 lakh in February.
SIP stoppage ratio had hit a record 122% in February, showing more SIPs closed than started.
Mutual Fund Industry Shows Resilience Amid Economic Crosscurrents
India’s mutual fund industry has demonstrated considerable strength amid a complex macroeconomic environment marked by rising global interest rates, trade policy tensions, and geopolitical instability. The minor dip in equity inflows and stable SIP volumes highlight how retail investors are increasingly looking past short-term fluctuations and staying committed to systematic investing.
Industry experts suggest that the current market trajectory, underpinned by robust domestic demand, strong corporate earnings, and supportive monetary policy, will continue to fuel the attractiveness of mutual funds as a long-term investment vehicle. The positive momentum in mutual fund company stocks only reinforces that sentiment.
Highlights:
The mutual fund industry remains fundamentally strong despite global headwinds.
Retail investors continue to prefer systematic investing over lump-sum volatility.
Favorable domestic conditions are expected to sustain investor confidence.
