Equity Mutual Fund Inflows Drop 13.9% to Rs 32,994 Crore in October as Small-Cap Demand Moderates
Net inflows into equity-oriented mutual fund schemes cooled in October, ending a run of record expansions as market corrections, global uncertainties, and aggressive foreign portfolio selling induced caution among domestic investors.
According to the monthly statistical report released by the Association of Mutual Funds in India (AMFI), net equity inflows fell 13.87 percent month-on-month to Rs 32,993.64 crore in October, compared with Rs 38,306.55 crore recorded in September. Open-ended equity schemes mobilized gross funds of Rs 65,581.36 crore against repurchase and redemption commitments totaling Rs 32,587.72 crore across 584 schemes.
The moderation coincided with widespread pressure on Indian benchmark indices, where sustained selling by foreign institutional investors (FIIs)—who pulled out Rs 34,843 crore during October—drove equities lower amid elevated US Treasury yields and geopolitical headwinds.
Category-Wise Allocation Trends
Investor appetite shifted away from high-beta, stretched-valuation segments toward blended and large-cap vehicles.
Key Equity Category Inflows:
- Large and Mid Cap Funds: Emerged as the biggest recipient of net equity capital, nearly doubling by 99 percent to Rs 8,484.23 crore in October from Rs 4,271.22 crore in September.
- Small Cap Funds: Inflows dropped by 29 percent to Rs 6,407.50 crore compared with Rs 9,038.57 crore recorded in the preceding month.
- Flexi Cap Funds: Attracted Rs 4,979 crore to Rs 4,980 crore, cooling from Rs 6,701.80 crore in September.
- Mid Cap Funds: Moderated sharply to Rs 4,892.84 crore, down from Rs 7,834.84 crore mobilized in September.
- Large Cap Funds: Maintained modest growth, picking up Rs 1,032 crore compared to Rs 859.47 crore in September.
- Contra Funds: Staged a strong turnaround, drawing Rs 1,694.13 crore in net inflows after suffering net outflows of Rs 97.88 crore in September.
- Outflows: Dividend yield schemes and Equity Linked Savings Schemes (ELSS) registered net redemptions of Rs 92.82 crore and Rs 577 crore, respectively.
SIPs and Passive Vehicles
Contributions through Systematic Investment Plans (SIPs) mirrored the broader cooling tone, easing marginally to Rs 32,160 crore in October from Rs 32,490 crore in September and Rs 32,297 crore in August.
Exchange-traded funds (ETFs) and index funds, however, witnessed resilient engagement. Total ETF mobilization increased by nearly 31 percent to Rs 20,303.98 crore, propelled primarily by equity ETFs, which drew Rs 12,973.78 crore. Silver ETFs recorded a 56 percent surge, securing Rs 3,092 crore, while gold ETFs saw inflows taper slightly to Rs 3,474.03 crore from Rs 4,450.61 crore in September.
Industry AUM Expands on Debt Rebound
Despite the retreat in active equity momentum, the broader mutual fund industry posted a strong rebound in net collections. Total net inflows across all categories hit Rs 1.73 lakh crore to Rs 1.74 lakh crore in October, reversing the steep net outflows of Rs 1.33 lakh crore registered in September.
The turnaround was underpinned by fixed-income debt schemes, which garnered Rs 1.13 lakh crore following quarter-end corporate withdrawals of Rs 1.83 lakh crore in September. Hybrid schemes also swung back into positive territory, capturing net inflows of Rs 3,514.06 crore—driven primarily by arbitrage funds receiving Rs 3,928.89 crore.
Consequently, the mutual fund industry's total assets under management (AUM) advanced to Rs 83.39 lakh crore as of October 31, up from Rs 82.64 lakh crore at the end of September. Equity-oriented AUM closed the month at Rs 37.15 lakh crore across more than 19.19 crore investor folios, demonstrating that long-term domestic commitments remain intact despite temporary market headwinds.
