India Equity Inflows Fall Again in January 2026
India’s equity mutual fund inflows eased for a second straight month in January 2026, falling to about ₹240 billion as investors turned cautious amid market volatility and global risks. Month-on-month flows declined, although systematic investment plan contributions remained stable.
India’s equity mutual fund inflows eased for a second straight month in January 2026, falling to about ₹240 billion as investors turned cautious amid market volatility and global risks. Month-on-month flows declined, although systematic investment plan contributions remained stable.
Indian Equity Mutual Fund Inflows Ease for Second Straight Month in January
Mumbai: Inflows into India’s equity mutual funds fell for a second consecutive month in January 2026, highlighting a cautious shift in investor sentiment amid volatile market conditions.
Data from the Association of Mutual Funds in India showed net inflows into equity schemes declined about 14 percent from December, reaching roughly ₹240 billion. Inflows had stood near ₹280 billion in December 2025.
Why Equity Fund Flows Are Cooling
Several factors appear to have weighed on equity mutual fund inflows during the month.
Market Volatility and Risk Appetite
Equity markets faced volatility in January, with benchmark indices posting modest declines. Global trade uncertainty and geopolitical tensions added to investor caution, limiting fresh allocations to equities.
Shift in Asset Allocation
Some investors redirected money toward alternative or defensive assets. Gold and other perceived safe-haven instruments attracted steady interest, reducing near-term appetite for equity funds.
Foreign Portfolio Activity
Foreign portfolio investors turned net sellers during parts of January. These outflows affected overall market liquidity and often influence domestic mutual fund investment behavior.
SIP Inflows Remain Resilient
Despite weaker lump-sum inflows, systematic investment plan contributions stayed firm. Industry data showed SIP inflows at around ₹31,000 crore, broadly unchanged from the previous month.
The steady SIP trend suggests retail investors continue to favour disciplined, long-term investing despite short-term market swings.
What This Means for Investors
Short-Term Perspective
Cooling equity fund inflows point to softer near-term confidence. Investors may wait for clearer signals from earnings, inflation data and global developments before committing fresh capital.
Long-Term Perspective
Stable SIP inflows indicate sustained confidence among long-term investors. Regular investments help average costs and reduce the impact of market volatility.
Portfolio Balance
The flow pattern underscores the importance of diversification. Investors appear to be balancing equity exposure with bonds, gold ETFs and other assets to manage risk.
Outlook
Mutual fund flows remain sensitive to domestic and global cues, including economic policy, interest rates, corporate earnings and geopolitical risks.
While January’s data shows cooling interest in equity schemes, steady SIP contributions suggest investor confidence has not weakened structurally. Market participants will closely track upcoming economic indicators and quarterly results for further direction.