Equity Mutual Fund Inflows Decline 14% in October Amid Market Volatility

Inflows into equity mutual funds dipped 14 per cent last month to ₹32,994 crore against ₹38,307 crore logged in September, driven by intense market volatility. Data released on Wednesday by the Association of Mutual Funds in India (AMFI) showed that flows through Systematic Investment Plans (SIPs) also fell to ₹32,160 crore compared to ₹32,490 crore previously.

The contributing SIP accounts moderated marginally to 10 crore from 10.06 crore in September. A consistent drag in equity assets under management (AUM) due to mark-to-market losses served as one of the major reasons for investors to pause their SIPs. Over the last two months, the SIP AUM has fallen 8 per cent to ₹17.08 lakh crore from ₹18.62 lakh crore logged in August amid weak market sentiments.

Venkat Chalasani, Chief Executive at AMFI, noted that despite market volatility, SIP contributions remained above ₹32,000 crore, reflecting ongoing investor confidence in equity investments. He added that while the marginal fall in contributing SIP accounts could be attributed to weak market sentiments, the market has already erased mark-to-market losses over the last few days following a drop in crude oil prices and positive outlooks by leading global institutions.

Category-wise data indicated that inflows into large-cap funds stood at ₹8,484 crore, outpacing small-cap funds at ₹6,407 crore and mid-cap funds at ₹4,980 crore.

Despite the dip in equity inflows, overall assets under management for the industry increased marginally to ₹83.39 lakh crore last month against ₹82.64 lakh crore in September. This growth was supported by debt funds, which registered an inflow of ₹1.13 lakh crore, recovering from an outflow of ₹1.83 lakh crore in the previous period.

Nitin Agrawal, Chief Executive Officer of Mutual Funds at InCred Money, stated that the partial AUM recovery against net industry inflows highlights that equity market volatility is still weighing on portfolio valuations, though the direction of travel has changed. He noted that October represents stabilization rather than a rebound, which characterizes a structurally sound market after a correction.

"A 14 percent dip in equity inflows alongside resilient SIP contributions above ₹32,000 crore demonstrates that retail investors are increasingly mature during market corrections. While short-term volatility and mark-to-market pressures understandably cause some pauses, the overall capital stability indicates enduring confidence in the domestic financial ecosystem. For founders and businesses, this steady retail liquidity pool remains a vital foundational element for the broader economic landscape." — Dr. Shishir Gupta, Founder & CEO, StartupLanes