Mid, Small Cap Inflows Surge Up to 32% as Gold ETF Investments Crash 78% in February: AMFI

Investor appetite for equities strengthened in February as mutual fund investors shifted funds away from gold and defensive assets into higher-growth equity categories and index-based investments, according to the latest data released by the Association of Mutual Funds in India.

The industry’s total assets under management (AUM) climbed to a record ₹82.03 lakh crore in February 2026, up from ₹81.01 lakh crore in January, despite volatility across some asset classes. However, overall net inflows into the mutual fund industry moderated to ₹94,530 crore in February, compared with ₹1.56 lakh crore in January, largely due to lower inflows into debt funds and a sharp decline in gold ETF investments.

Mid, Small Caps Lead Equity Inflows

Within equity mutual funds, investors showed a clear preference for higher-growth segments such as mid-cap and small-cap funds, while inflows into diversified flexi-cap funds declined.

• Mid Cap Funds: Inflows rose 26% month-on-month to ₹4,003 crore in February, compared with ₹3,185 crore in January.
• Small Cap Funds: Investments increased 32% to ₹3,881 crore, up from ₹2,942 crore in the previous month.
• Large Cap Funds: Recorded modest inflows of ₹2,112 crore, a 5% rise from ₹2,005 crore in January.

At the same time, Flexi Cap Funds saw inflows decline 10% month-on-month, falling to ₹6,924 crore from ₹7,672 crore.

One of the biggest jumps was recorded in sectoral and thematic funds, where inflows surged 187% to ₹2,987 crore, compared with ₹1,043 crore in January, reflecting rising investor appetite for targeted sector bets. Meanwhile, tax-saving Equity Linked Savings Schemes (ELSS) continued to witness outflows, with ₹650 crore exiting the category, compared with ₹594 crore in January.

Gold ETF Inflows Collapse 78% as Index Funds Surge

The most dramatic shift in investor behaviour was visible in passive investment categories. Gold exchange-traded funds saw inflows collapse 78% month-on-month, dropping to ₹5,255 crore in February from ₹24,040 crore in January. In contrast, index funds saw an extraordinary spike in inflows, jumping to ₹3,233 crore from just ₹27 crore in January, marking a surge of nearly 11,874%.

Silver ETFs also saw weak sentiment, with the segment recording a net outflow of ₹826 crore during the month. The shift shows investors are rotating capital away from crisis hedges like gold toward market-linked investments that track benchmark indices such as the Nifty 50 and the BSE Sensex.

Debt Funds Continue to Drive Industry Flows

Despite the equity momentum, debt funds remained the largest contributor to overall industry inflows.

• Liquid Funds: Attracted ₹59,077 crore, nearly doubling from January levels as corporates parked surplus cash.
• Overnight Funds: Recorded a sharp reversal with ₹14,006 crore in outflows, compared with ₹46,280 crore in inflows in January.
• Multi-Asset Allocation Funds: Continued to remain popular among investors, attracting ₹8,476 crore in inflows during February.

The mutual fund industry also witnessed activity in new product launches. A total of 22 New Fund Offers (NFOs) were launched during February, mobilising ₹4,979 crore from investors.

The continued rise in AUM to ₹82.03 lakh crore highlights the expanding participation of retail and institutional investors in India’s capital markets.

Overall, the February data suggests investors are gradually shifting back to a “risk-on” approach, reallocating money from defensive assets like gold and short-term cash parking instruments toward growth-oriented equity segments and index-linked investments.

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