MF flows bounce in Jan-26; Precious Metal ETFs shine

24 Feb 2026 , 03:22 PM

January 2026 was unusual for the mutual fund industry. Instead of equity funds leading the story, precious metals ETFs, especially gold and silver dominated inflows.

Total net inflows into mutual funds stood at ₹1,56,459 crore during the month. Of this:

• ₹39,955 crore came into passive funds

• ₹33,503 crore of passive inflows went into Gold and Silver ETFs alone

In fact, inflows into Gold ETFs exceeded the total inflows into all active equity fund categories combined.

Sources of Mutual Fund Flows

There are three main contributors to monthly mutual fund flows:

1. New Fund Offerings (NFOs)
   January 2026 saw relatively muted activity, with ₹1,939 crore raised across 12 schemes. Active debt funds accounted for the majority of these collections.

2. Systematic Investment Plans (SIPs)
   SIP inflows stood steady at ₹31,000 crore. However, AMFI reports only gross SIP numbers, not net flows after redemptions.

3. Lump-sum Investments
   Net lump-sum investments, along with SIPs and NFOs, together determine overall net flows.

Apart from flows, changes in Assets Under Management (AUM) are also influenced by market performance.

Category-wise Flow Trends – January 2026

Fund Category	Gross Inflows (₹ Crore)	Redemptions (₹ Crore)	Net Flows (₹ Crore)	Total AUM (₹ Crore)
Active Debt Funds	11,98,502.70	11,23,675.56	74,827.13	18,90,273.21
Active Equity Funds	65,667.28	41,638.69	24,028.59	34,86,777.63
Hybrid Allocation Funds #	52,204.28	34,506.51	17,697.77	11,57,940.90
Passive Funds	68,551.02	28,596.39	39,954.63	15,41,350.31
Open-Ended Funds	13,84,925.27	12,28,417.15	1,56,508.12	80,76,342.04
Closed-Ended Funds	15.41	64.89	-49.48	24,963.54
Mutual Funds Grand Total	13,84,940.68	12,28,482.05	1,56,458.63	81,01,305.58
Data Source: AMFI (# – includes Solution Funds too)

1) Active Debt Funds: Short-End Dominates

Debt funds recorded ₹74,827 crore in net inflows as money returned after quarter-end withdrawals (typically due to advance tax payments).

Major inflow categories:

• Overnight Funds – ₹46,280 crore

• Liquid Funds – ₹30,682 crore

• Money Market Funds – ₹12,763 crore

• Low Duration Funds – ₹4,779 crore

Categories with outflows:

• Corporate Bond Funds – ₹11,473 crore

• Short Duration Funds – ₹2,889 crore

Out of 16 debt categories, 7 saw net inflows while 9 witnessed outflows.

Trend Insight: Investors preferred short-duration and liquidity-focused products, indicating caution and a preference for flexibility.

2) Active Equity Funds: Slower Momentum

Active equity fund inflows declined 14.3% month-on-month, totaling ₹24,029 crore. Flows are now over 45% lower compared to the July 2025 peak.

Key inflow categories:

• Flexi-Cap Funds – ₹7,672 crore

• Mid-Cap Funds – ₹3,185 crore

• Large & Mid-Cap Funds – ₹3,182 crore

• Small Cap Funds – ₹2,942 crore

• Large Cap Funds – ₹2,005 crore

All categories saw positive inflows except ELSS funds.

Trend Insight: Investors are focusing more on diversified allocation strategies rather than thematic or sector-specific bets. However, some “alpha hunting” continues in mid-cap and small-cap segments.

Interestingly, the earlier enthusiasm for thematic funds now appears to have shifted toward gold and silver ETFs.

3) Hybrid Funds: Multi-Asset Allocation in Focus

Hybrid and solution-oriented funds recorded strong inflows of ₹17,698 crore.

Major contributors:

• Multi-Asset Allocation Funds – ₹10,485 crore

• Arbitrage Funds – ₹3,293 crore

• Balanced Advantage Funds – ₹1,839 crore

Only Conservative Hybrid Funds saw marginal outflows.

Trend Insight: Multi-asset allocation funds are gaining traction, largely due to their exposure to gold and silver. Investors appear to prefer diversified risk management in volatile markets.

4) Passive Funds: The Biggest Story of the Month

January 2026 marked a significant milestone — passive funds accounted for more than half of total net inflows for the first time.

Passive fund inflows totaled ₹39,955 crore, with the following breakdown:

• Gold ETFs – ₹24,040 crore

• Silver ETFs – ₹9,463 crore

• Equity Index ETFs – ₹5,885 crore

• Equity Index Funds – ₹2,828 crore

Precious metal ETFs clearly led the momentum.

Important Observation: While strong inflows indicate rising investor interest, rapid inflows into gold and silver ETFs may also signal speculative enthusiasm. Historically, such phases can be followed by volatility.

Folio Growth – Measuring Retail Participation

Folios represent investor accounts with Asset Management Companies (AMCs). While they do not represent unique investors (as one investor can hold multiple folios), they provide a strong indicator of retail participation.

Key Highlights (YoY Growth – Jan 2026 vs Jan 2025):

• Active Debt Funds – 17.75% growth

• Active Equity Funds – 11.81% growth

• Hybrid Funds – 14.69% growth

• Passive Funds – 34.72% growth

• Total Mutual Fund Folios – 16.19% growth

Over the past year, the industry added 3.71 crore new folios, with:

• 1.90 crore added in active equity funds

• 1.38 crore added in passive funds

Passive funds recorded the highest percentage growth in folios, clearly indicating a shift in retail interest — particularly toward gold and silver ETFs.

Overall folio growth has moderated slightly, which is natural given the large base and elevated market levels.

Key Takeaways

1. Debt Funds:
   Short-term debt funds continue to see revival in flows after quarter-end redemptions. Retail and HNI participation appears to be improving.

2. Active Equity Funds:
   Inflows have slowed at higher market levels. Investors seem more cost-conscious and cautious about alpha generation in volatile markets.

3. Passive Funds & Precious Metals:
   The standout theme of January 2026 was passive investing — especially gold and silver ETFs. Investors are not only allocating more money but also entering in larger numbers.

January 2026 marked a clear shift in investor preference across mutual fund categories. Debt funds saw a recovery in flows, particularly at the shorter end of the curve, while hybrid funds strengthened further, led by multi-asset allocation strategies. In contrast, inflows into active equity funds slowed amid elevated market levels and rising volatility. The standout theme of the month was passive investing, with precious metals ETFs, especially gold and silver dominating both overall inflows and folio growth. Going forward, the key question will be how investors respond if volatility in gold and silver prices increases. The sustainability of these strong flows will depend largely on investor discipline during periods of correction. For now, precious metals have clearly defined the market narrative.