By- Mr. Umesh Sharma, CIO-Debt, The Wealth Company Mutual on March AMFI data:
Debt-oriented schemes recorded net outflows of INR 2,94,987 crore in March 2026, largely driven by significant redemptions from funds with maturities of less than one year. Such outflows at the shorter end of the curve are a recurring seasonal trend, as March coincides with both quarter-end and financial year-end liquidity requirements, a pattern observed consistently each year.
Duration-focused categories also remained under pressure, with most continuing to witness net outflows. The risk–reward balance in these segments appears unfavourable amid elevated geopolitical uncertainty, which has pushed energy prices higher and exerted upward pressure on yields, resulting in mark-to-market impacts on investor portfolios. Corporate Bond Funds saw outflows of nearly ₹15,000 crore, extending the weakness seen in previous months, as investors reassessed mark-to-market sensitivity within high-quality duration strategies.
Equity-oriented schemes recorded healthy net inflows of nearly ₹40,000 crore in March, around 40% higher than the previous month, as the post-correction phase in equity markets following the onset of the West Asia conflict created more attractive investment opportunities. While Flexi Cap funds continued to attract steady inflows, categories such as small-cap and mid-cap funds witnessed stronger allocations compared to earlier months, reflecting increased investor interest in segments where valuations had moderated and return potential appeared more favourable.
Hybrid schemes, however, reported net outflows of nearly ₹16,500 crore, largely driven by Arbitrage Funds, which alone saw outflows of around ₹21,000 crore. In contrast, Multi-Asset Allocation Funds recorded inflows of over ₹5,000 crore, indicating a preference for diversified asset allocation strategies amid heightened global uncertainty. Other ETF categories witnessed strong inflows, largely supported by sustained equity-related investments. In contrast, inflows into Gold ETFs moderated to around ₹2,000 crore in March, lower than levels seen in previous months, probably as relative valuations became more favourable toward equities compared with gold.
Overall, March flows reflect a clear tilt toward growth-oriented assets, with equities attracting higher allocations as market corrections created attractive entry points. At the same time, fixed income witnessed sharp redemptions, largely due to seasonal year-end liquidity needs and concerns around inflation and yield volatility. Together, these trends underscore an investor preference for maximizing return potential while remaining cautious on duration and interest rate risk in a globally uncertain environment.
