India's mutual fund industry recorded net outflows of ₹1.33 lakh crore in September 2026, reversing the ₹41,353 crore inflows registered in August, as substantial withdrawals from debt-oriented schemes overshadowed continued investor interest in equity funds. The sharp reversal also coincided with a decline in the industry's assets under management (AUM), according to data released by the Association of Mutual Funds in India (AMFI) on Monday.
The industry's net AUM fell to ₹82.64 lakh crore at the end of September from ₹87.08 lakh crore in August, a decline of approximately 5%. However, equity mutual funds continued to attract investments, while contributions through systematic investment plans (SIPs) reached a record high, reflecting contrasting trends across different investment categories.
𝗗𝗲𝗯𝘁 𝗳𝘂𝗻𝗱𝘀 𝘀𝗲𝗲 𝗵𝗲𝗮𝘃𝘆 𝘄𝗶𝘁𝗵𝗱𝗿𝗮𝘄𝗮𝗹𝘀
Debt-oriented mutual fund schemes accounted for the bulk of the industry's outflows, registering net withdrawals of ₹1.83 lakh crore in September, compared with ₹8,127 crore in August. The significant increase in redemptions was concentrated in short-duration investment categories, particularly liquid and money market funds.
Liquid funds witnessed net outflows of ₹95,743 crore during September, reversing the ₹19,934 crore inflows recorded in the preceding month. Money market funds also experienced substantial withdrawals of ₹50,846 crore, compared with inflows of ₹11,735 crore in August.
The sharp reversal in these categories contributed significantly to the industry's overall negative flows. Such funds are commonly used by institutional and corporate investors to manage short-term liquidity, making their monthly flows sensitive to changes in cash requirements and financial conditions.
The withdrawals were large enough to offset positive investments in equity funds and other categories, pushing the mutual fund industry into negative territory despite continued participation by retail investors.
𝗘𝗾𝘂𝗶𝘁𝘆 𝗶𝗻𝗳𝗹𝗼𝘄𝘀 𝗿𝗶𝘀𝗲 𝟯𝟭%
In contrast to the debt segment, equity-oriented mutual funds attracted net inflows of ₹38,307 crore in September, representing an increase of approximately 31% from ₹29,328 crore in August.
Small-cap funds led the equity categories with net inflows of ₹9,039 crore, up from ₹7,973 crore in the previous month. Mid-cap funds followed with investments of ₹7,835 crore, compared with ₹6,989 crore in August.
Flexi-cap funds also recorded stronger investor interest, attracting ₹6,702 crore during September against ₹5,059 crore in the preceding month.
Large-cap funds returned to positive territory, registering net inflows of ₹859 crore after witnessing withdrawals of ₹1,147 crore in August. Sectoral and thematic funds together attracted ₹3,640 crore, more than double the ₹1,713 crore recorded in the previous month.
The improvement across several equity categories indicated that investors continued to allocate money to stock market-linked schemes despite the overall contraction in mutual fund assets. However, equity mutual fund AUM declined 4.3% month-on-month to ₹37.54 lakh crore, showing that positive net investments did not prevent a reduction in the market value of assets held by these schemes.
𝗦𝗜𝗣 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻𝘀 𝗵𝗶𝘁 𝗿𝗲𝗰𝗼𝗿𝗱
Monthly SIP contributions reached an all-time high of ₹32,490 crore in September, marginally exceeding the ₹32,297 crore recorded in August. The figure also represented an increase of approximately 11% over the ₹29,361 crore contributed in September 2025.
The record SIP collections highlighted the continued importance of regular investment plans in supporting mutual fund inflows, particularly at a time when institutional investors were withdrawing substantial amounts from debt schemes. SIPs allow investors to contribute fixed amounts at regular intervals, providing a structured approach to investing across market conditions. However, they do not guarantee returns or eliminate the risks associated with market fluctuations.
𝗚𝗼𝗹𝗱 𝗘𝗧𝗙𝘀 𝗮𝘁𝘁𝗿𝗮𝗰𝘁 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀
Gold exchange-traded funds (ETFs) witnessed a sharp increase in investments, with net inflows rising to ₹4,451 crore in September from ₹2,597 crore in August, an increase of more than 71%.
Overall ETF inflows climbed to ₹15,501 crore during the month, compared with ₹10,161 crore in August. Equity ETFs attracted ₹9,960 crore, while silver ETFs received ₹1,974 crore, up from ₹1,271 crore in the preceding month.
The increase in allocations to precious metal ETFs came amid heightened uncertainty in global financial markets and changing investor preferences. Multi-asset allocation funds, meanwhile, recorded relatively stable inflows of ₹3,667 crore, compared with ₹3,671 crore in August.
𝗛𝘆𝗯𝗿𝗶𝗱 𝗳𝘂𝗻𝗱𝘀 𝗳𝗮𝗰𝗲 𝗿𝗲𝘃𝗲𝗿𝘀𝗮𝗹
Hybrid mutual fund schemes, which invest across asset classes such as equity and debt, registered net outflows of ₹457 crore in September, reversing the ₹10,045 crore inflows recorded in August.
Arbitrage funds accounted for a substantial portion of the reversal, witnessing withdrawals of ₹3,956 crore after attracting ₹3,789 crore in the previous month. The movement in hybrid schemes added to the divergence between categories, with some investment products continuing to attract funds while others experienced significant redemptions.
𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝘁 𝘁𝗿𝗲𝗻𝗱𝘀 𝗲𝗺𝗲𝗿𝗴𝗲
The September figures showed that the industry's overall outflows were driven primarily by the debt segment rather than a broad-based withdrawal from mutual funds. Stronger equity inflows, record SIP contributions and rising investments in gold ETFs contrasted with heavy redemptions from liquid and money market schemes.
The decline in total AUM reflected the combined effect of net withdrawals and changes in asset valuations, while the increase in equity investments suggested continued investor participation in market-linked products.
Market participants will closely monitor the coming months to determine whether September's substantial debt fund withdrawals represent a temporary adjustment in liquidity requirements or a more sustained shift in investment allocations.
The data underline the increasingly varied behaviour of mutual fund investors, with short-term liquidity management and longer-term investment commitments producing markedly different outcomes across the industry.