Indian equity mutual funds saw a second straight month of decline in inflows in Januray, as weak market conditions and rising geopolitical and trade concerns made investors cautious, according to latest data released by the Association of Mutual Funds in India (AMFI) on Tuesday.
Official data sgowed that inflows into equity funds dropped by 14.35% to Rs 24,028.59 crore during the month under review from Rs 28,054.06 crore in December 2025.
In the previous month of November 2025, equity mutual funds clocked inflows worth Rs 29,911.05 crore, resulting in a second straight month of fall in equity mutual fund investment in January 2026.
Flexi-cap funds see the sharpest fall
Flexi-cap funds, which allow fund managers to freely move across market capitalisations, witnessed a sharp drop in inflows in January 2026. Net inflows fell to Rs 7,672.36 crore in January from Rs 10,019.27 crore in December 2025. This is a decline of Rs 2,346.91 crore, translating into a 23.4% month-on-month fall. The sharp correction suggests investors turned cautious amid market volatility and preferred to slow fresh allocations.
Large & mid-cap funds also lose momentum
Large and mid-cap funds saw a noticeable cooling in investor interest too. Inflows declined from Rs 4,093.51 crore in December to Rs 3,181.89 crore in January, a drop of Rs 911.62 crore. This marks a 22.3% decline on a monthly basis.
Mid-cap funds also saw a significant decline. Net inflows fell from Rs 4,175.81 crore in December to Rs 3,185.47 crore in January 2026. This represents a fall of Rs 990.34 crore, or a 23.7% month-on-month decline.
Small-cap funds witness steady pullback
Small-cap funds continued to see moderation in flows as investors remained wary of valuations and volatility. In January 2026, inflows stood at Rs 2,942.11 crore, down from Rs 3,823.82 crore in December. The decline of Rs 881.71 crore amounts to a 23.1% fall, showing that risk appetite weakened even in the high-return-seeking segment.
Large-cap funds buck the trend
In contrast, large-cap funds saw a jump of nearly 28% in inflows last month. Inflows stood at Rs 2,004.98 crore against Rs 1,567.42 crore in the previous month.
Multi-cap funds see the least decline, but trend remains weak
Multi-cap funds recorded the smallest drop among major equity categories, but the trend remained negative. Inflows slipped from Rs 2,254.95 crore in December to Rs 1,995.23 crore in January, a decline of Rs 259.72 crore. This equals an 11.5% month-on-month fall, suggesting relative stability but still reflecting overall caution across equity mutual funds.
Total AUM increased significantly in Jan despite weak equity fund inflows
As regards the overall assets under management of the Indian mutual fund industry, total AUM has increased by Rs 77,926.59 crore to Rs 81,01,305.58 crore.
Varun Gupta, CEO, Groww Mutual Fund, says, “Despite a volatile month for equity markets, mutual fund AUM expanded in January, highlighting the resilience of investor participation. Notably, all open-ended scheme segments recorded net inflows, with equity segments seeing positive inflows in virtually all scheme categories, despite market swings – underscoring the growing discipline and long-term orientation of Indian investors.”
Gold ETFs standout performer
One of the highlights of AMFI data for the month of January was a massive surge in inflows into gold ETFs (exchange-traded funds). Gold ETF inflows more than doubled to Rs 24,039.96 crore in January 2026 from Rs 11,646.74 crore in the previous month.
“Key standout, however, were gold ETFs, with AUM rising nearly 50% and monthly inflows exceeding those into the entire equity segment, pointing to the increasing financialisation of gold as an investment asset,” says Gupta.
SIP performance steady
SIP inflows remained robust, continuing to be the backbone of the mutual fund market. Monthly SIP inflows crossed Rs 31,000 crore during the month, helping the cumulative SIP assets to grow to Rs 16.6 lakh crore, data showed.
SIPs now contribute over one-fifth of total equity AUM — a powerful indicator of structural, long-term capital formation.
Debt-oriented mutual funds performance
Debt-oriented mutual funds came to the rescue of the industry when equity funds struggled during the month. Debt fund categories logged a sharp turnaround, witnessing net inflows of Rs 74,827 crore. In the previous month, income/debt-oriented schemes saw heavy net outflows of Rs 1.32 lakh crore.
“The reversal largely reflects post year-end cash redeployment as corporate and institutional investors reinvest surplus balances that were temporarily drawn down in December,” according to Nehal Meshram, Senior Analyst, Morningstar Investment Research India.