Mutual fund flows held firm in February despite a shorter month and choppy markets — retail India is still showing up
India’s systematic investment plan contributions came in at Rs 29,800 crore in February 2026, roughly flat from the month before — and that near-stability is arguably more impressive than it looks.
February is a shorter month. A chunk of SIP instalments that would normally have been debited simply rolled into March, nudging the number of active contributing SIP accounts down to 94.4 million from 99.2 million in January. Strip out that calendar quirk and the underlying momentum is intact. SIP assets under management actually grew, rising 1.7% month-on-month to Rs 16,64,000 crore, which now equals to just over a fifth of the entire mutual fund industry.
That figure — 20.3% of industry AUM — is the one fund managers will continue to bank on. It means retail India, the salaried professional dripping Rs 500 or Rs 5,000 into a fund every month, has become the industry’s backbone. Markets can swing, while these inflows tend to hold steady.
Equity Flows: Mid and Small-Cap Steal the Show
Net equity inflows rose 8% month-on-month to Rs 25,980 crore in February, even as gross flows dipped 5% to Rs 62,080 crore. The saving grace was a sharper fall in redemptions — down 13% to Rs 36,100 crore — suggesting investors chose to sit tight rather than book profits or cut losses in a volatile tape.
Flexi-cap funds remained the category kingpin, pulling in Rs 6,920 crore of net inflows, though flows softened sequentially. The real action was further down the market-cap curve. Mid-cap funds saw net inflows jump 26% month-on-month to Rs 4,000 crore, while small-cap funds surged 32% to Rs 3,880 crore. Retail investors, it appears, are not spooked by volatility. On the contrary, if anything, they are leaning into it.
Sectoral and thematic funds delivered the month’s most dramatic swing, with net inflows skyrocketing 187% month-on-month to Rs 2,990 crore, driven by new fund offer activity and focused thematic bets. Large-cap and large-and-mid-cap funds held steady at Rs 2,110 crore and Rs 3,140 crore respectively. ELSS remained in outflow territory at minus Rs 650 crore, a trend that has become something of a seasonal fixture as the tax-saving window winds down.
Hybrid and the Multi-Asset Trade
Hybrid funds excluding arbitrage posted net inflows of Rs 11,390 crore — a 19% month-on-month decline from a strong January, but hardly a distress signal. Gross flows fell 14% to Rs 20,480 crore, while redemptions eased 7% to Rs 9,090 crore.
Multi-asset allocation funds continued to dominate within the category, drawing Rs 8,480 crore in net inflows. The message from investors is consistent: in an uncertain macro environment, let the fund manager handle the asset allocation. Balanced advantage and dynamic asset allocation funds added another Rs 1,520 crore, while balanced and aggressive hybrid schemes contributed Rs 1,420 crore.
The Bigger Picture: Rs 820 Lakh Crore Industry and Counting
The Indian mutual fund industry’s total AUM crossed Rs 8,20,000 crore — or Rs 820 lakh crore — in February 2026, up 1.3% from January and 27.1% from a year ago. That year-on-year number is the one that puts the monthly wobbles in context.
Gold ETF flows, while still positive at Rs 5,260 crore, cooled sharply from January’s record Rs 24,020 crore — that was always going to be a tough act to follow. Passive fund flows similarly moderated to Rs 13,900 crore from a high base. Neither move suggests a structural reversal; both reflect the natural digestion that follows a sprint.
Specialist Investment Funds, the newer vehicle that straddles mutual funds and portfolio management services, continued to build momentum. SIF assets rose nearly 48% month-on-month to Rs 9,710 crore, with three new strategies launched during February alone, collectively raising Rs 1,350 crore.
