Inflows into active equity mutual funds increased by 8% in February 2026, reflecting continued investor interest in risk assets despite heightened volatility in other segments. According to data released by the Association of Mutual Funds in India (AMFI) on Tuesday, equity funds across large, mid, and small-cap categories recorded higher inflows, while gold ETFs experienced a significant drop. The changing investment landscape underscores a shift in investor preference towards equities, even as debt and hybrid fund categories showed divergent trends.
Equity mutual funds maintained strong momentum, with notable growth in the mid-cap segment, which saw monthly inflows rise by 26%, and small-cap funds, which recorded a 32% increase. Large-cap funds also contributed to the overall positive trend with a 5% uptick. However, flexicap funds witnessed a 10% decline in inflows, down from Rs 7,672 crore in January 2026, indicating a selective approach among investors.
Gold exchange-traded funds (ETFs) continued to see strong investor interest, although inflows moderated in February after a record surge in the previous month. The category recorded net inflows of ₹5,255 crore in February, sharply lower than the all-time high of ₹24,040 crore in January.
Feroze Azeez, Joint CEO, Anand Rathi Wealth Limited, said: “The February 2026 AMFI data reflects the growing maturity of Indian retail investors. Despite phases of market volatility and an uncertain global backdrop, equity mutual funds continued to attract healthy inflows, which rose about 8% month on month to nearly ₹26,000 crore. Investor interest remained particularly strong in categories such as flexi cap, mid cap and small cap funds, indicating that investors are increasingly looking beyond short term market movements and participating in India’s long term growth opportunity.”
On Gold ETFs, Azeez noted: “We also saw some moderation in flows towards gold ETFs after the strong inflows witnessed earlier, particularly as gold and silver prices remained volatile during the month. At the same time, debt funds continued to see positive inflows for the second consecutive month, although at a lower level compared with January. Overall, the data indicates that investors are maintaining meaningful exposure to equities while also gradually diversifying across asset classes in response to evolving market conditions.”
Inflows had jumped 106.4% in January to ₹24,039.96 crore, up from ₹11,646.74 crore in December, following an even sharper rise in the prior month. In December, gold ETFs had seen inflows surge 211.2% from ₹3,741.79 crore in November, highlighting strong demand for safe-haven assets amid market volatility.
Within the sectoral and thematic funds category, inflows jumped impressively by 187% to Rs 2,987 crore in February. Dividend yield funds and focused funds, by contrast, posted declines of 56% and 42%, respectively, while value/contra funds saw a 27% decrease in monthly inflows to Rs 727 crore. The preference for specific sectors appears to have driven the surge in thematic investments, while more traditional strategies trended lower.
Hybrid funds registered a sharp 31% decline in monthly inflows, falling to Rs 11,983 crore in February from Rs 17,356 crore in January. Multi-asset allocation funds attracted the most within this segment, securing Rs 8,476 crore in inflows, followed by balanced advantage and dynamic asset allocation funds at Rs 1,521 crore. Conservative hybrid funds continued their outflow trend for the fourth consecutive month, with Rs 67.87 crore withdrawn in February.
The arbitrage and equity savings categories within hybrid funds were particularly affected. Arbitrage funds recorded the steepest monthly decline of 82%, dropping to Rs 591 crore from Rs 3,293 crore in January, while equity savings funds fell by 89% to just Rs 136 crore. This sharp contraction reflects reduced demand in short-term and hybrid arbitrage investment strategies.
Debt funds, while still in positive territory for the second month running, saw a 44% decrease in net inflows, totalling Rs 42,106 crore compared with Rs 74,827 crore the previous month. Liquid funds led with Rs 59,077 crore in inflows, followed by money market funds at Rs 6,266 crore. Overnight funds, however, experienced the highest outflow of Rs 14,006 crore, and ultra short-duration funds recorded an outflow of Rs 4,373 crore.
Other schemes, including passive options such as gold and silver ETFs, fund of funds, and index funds, witnessed monthly inflows drop 65% to Rs 13,879 crore in February, compared with Rs 39,954 crore in January. Gold ETFs saw the largest decrease, with inflows dropping to Rs 5,254 crore from Rs 24,039 crore, representing a 78% monthly decline. Silver ETFs registered an outflow of Rs 826 crore.
Comparing the broader trends, sectoral and thematic funds have increasingly drawn investor attention, while traditional safe havens like gold ETFs saw diminished interest. According to AMFI data, February’s inflows and outflows highlight a pronounced shift in risk appetite, as investor allocations moved away from gold and conservative hybrids toward equities and specific sector plays.
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