Equity-oriented open-ended mutual funds registered net inflows of ₹24,269 crore in April as it continued to draw strong investor interest. Though marginally lower than March’s ₹25,082 crore, the inflows remain significant, particularly in light of a tense global environment and fresh regional uncertainties following the Pahalgam terrorist attack on April 22, which reignited geopolitical tensions between India and Pakistan.
Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India, said, “This consistent flow into equities reflects an improving investor outlook. The optimism is being buoyed by robust corporate earnings, stable macroeconomic indicators, and a structural shift in investor preference toward equities as the asset class of choice. Interestingly, these inflows came despite the absence of any major new fund launches, implying that investors are increasingly placing their trust in existing, well-performing schemes.”
Retail participation also continued to climb in April as reflected in the growing number of folios. The rising participation helped boost the total assets under management (AUM) for equity-oriented schemes from ₹29.45 lakh crore in March to ₹30.57 lakh crore in April, a notable milestone that further underlines investor faith in the Indian growth story.
Srivastava said, “April marked the fourth consecutive month of declining net equity inflows, now at their lowest in the past 12 months. The gradual moderation signals the emergence of a cautious undercurrent among investors. Heightened global risks, including a widening U.S.-led tariff war and rising regional security threats, are prompting some to reassess their exposure to emerging markets like India, which are particularly sensitive to external shocks.”
On a category-wise basis, all equity fund types attracted net inflows except the Equity Linked Savings Scheme (ELSS), which witnessed expected outflows in the post-tax-season period. Flexi-cap funds emerged as the frontrunners, drawing the highest net inflows. This trend suggests that investors are gravitating towards schemes offering flexibility to dynamically allocate across large-, mid-, and small-cap segments—seeking a balance between risk and reward.
Meanwhile, passive investing continued to gain momentum. Exchange Traded Funds (ETFs), particularly under the ‘Other ETFs’ category, saw a sharp rise in inflows, jumping to ₹19,056 crore in April from ₹10,961 crore in March. The surge highlights a growing preference among investors for low-cost, index-tracking instruments that offer efficient market exposure.
“Despite the cautionary signals emerging globally, the Indian mutual fund industry’s steady performance in April underscores the resilience of domestic investors and their growing comfort with long-term equity investing. The coming months, however, will test this resilience as markets navigate complex geopolitical and macroeconomic currents,” said Srivastava.
Besides, Manish Mehta, National Head – Sales, Marketing & Digital Business, Kotak Mahindra AMC, said “Fixed income category saw a large inflow. Many institutional investors who redeem due to year end, invested back in categories like liquid, ultra-short term. Within equity, net flow could be attributed to the SIP flows. With market uncertainty, lump sum participation seems to be come down as investors are probably taking a waiting approach to fresh investments. Volatility is an investors friend and continuing to invest through SIP/STP would be the prudent approach at such times.”
Suranjana Borthakhur, Head of Distribution & Strategic Alliances, Mirae Asset Investment Managers (India), said the recovery in mutual fund flows in April is encouraging, especially after the typical quarter-end outflows seen in March. “For long-term portfolios, we continue to believe that mid- and small-cap allocations are essential for wealth creation. Sectoral funds witnessed a strong recovery—not driven by new NFOs, but by genuine investor interest—though we recommend keeping these as satellite allocations and not letting them be guided by product euphoria. ELSS has seen a dip, likely due to recent taxation changes, and may not witness significant inflows going forward. Hybrids have bounced back as well, especially arbitrage funds, which received ₹11,000 crore this month, indicating they are being seen as a safe space to park funds before further deployment. Overall, the flows suggest that investors are making thoughtful and balanced allocation decisions.”