Market Selloff Causes 26% Drop in Equity Fund Inflows

In February, equity mutual fund inflows fell by 26% to ₹29,303 crore due to a significant market selloff. This marks the second consecutive month of decline in equity fund inflows. The Association of Mutual Funds in India (AMFI) reported that the net inflow into open-ended equity funds has remained positive for 48 months in a row. However, the market correction led to a sharp decline in inflows.

The benchmark indices, BSE Sensex and Nifty 50, experienced a slump of 5.55% and 5.89%, respectively, due to global uncertainties, weak earnings, and a sluggish economy. Debt mutual funds also saw a net outflow of ₹6,525 crore in February, compared to a net inflow of ₹1.28 lakh crore in January.

Despite the decline, sectoral and thematic funds received the highest inflows of ₹5,711 crore, followed by flexi cap funds with ₹5,104 crore. Small-cap and mid-cap funds saw a significant drop in inflows, while focused funds experienced a surge.

Overall, the mutual fund industry’s assets under management (AUM) decreased by 4% to ₹64.26 lakh crore in February