SIP heroes stand firm: ₹31,000+ crore monthly flows despite volatility
The most reassuring signal from recent mutual fund data is the resilience of systematic investment plan (SIP) flows. Despite overall equity inflows declining to October 2025 levels of approximately ₹24,000 crore, SIP contributions have remained rock-solid above ₹31,000 crore monthly.
Talking to ET Now, Suranjana Borthakur says: It’s “good to see the SIP flows remain very steady. In spite of the total numbers coming down in equity, the SIP book has remained above 31,000 crore.”
This demonstrates that retail investors with disciplined, long-term investment approaches are not being swayed by short-term market turbulence. The SIP heroes continue their regular contributions regardless of index movements, providing stable capital flows to the mutual fund industry.
Flight to diversification: Flexicap leads at ₹7,600 crores
Within equity categories, a clear preference for diversified strategies has emerged. Flexicap funds continue attracting the largest inflows among all equity categories, pulling in approximately ₹7,600 crore.
“What is good to see is flexicap where people are moving more towards diversified categories,” Borthakur observed. This shift suggests investors are favouring fund managers with flexibility to move across market capitalizations rather than being locked into specific size segments.
Other notable movements include:
- Focused funds: Showed the biggest month-on-month increase, though absolute flows remain around ₹1,500 crore
- Large-cap funds: Up 28% versus previous month, though levels remain relatively flat overall
- Sectoral/thematic funds: Saw marginal uptick with ₹423 crore coming through new fund offerings (NFOs)
Importantly, the frenzy of just exciting categories attracting money has tapered down to an extent, according to Borthakur, suggesting investors are becoming more measured in their approach to hot themes and sector bets.
The gold rush: ETF inflows double to ₹24,000 crore
Perhaps the most dramatic shift in investor allocation has been toward gold exchange-traded funds. Monthly inflows skyrocketed from ₹11,000 crore to approximately ₹24,000 crore—a stunning 118% month-on-month increase.“Gold has seen a huge excitement,” Borthakur stated. This massive influx reflects both hedging behavior during equity market uncertainty and investor enthusiasm for precious metals, which have delivered strong returns recently.
Silver ETFs also contributed to this trend, though gold clearly dominated the precious metals allocation. In contrast, other ETF categories showed modest growth of just 14%, highlighting how specifically gold-focused the recent inflows have been.
Hybrid funds surge 61%: The defensive positioning play
The hybrid fund category emerged as a major beneficiary of the current market environment, with total inflows jumping 61% month-on-month. This dramatic increase signals investors seeking balanced exposure rather than pure equity risk.
“In the tepid markets, the hybrid categories have been seeing good attention from investors,” Borthakur explained. Within hybrids, several sub-categories showed particularly strong momentum:
Hybrid fund category performance
| Category | Monthly Inflows | MoM Change |
| Multi-Asset Funds | ₹10,000 crores | Strong |
| Balanced Advantage (BAF) | Significant | +68% |
| Arbitrage Funds | Higher | Highest MoM |
Note: Arbitrage funds saw the highest month-on-month increase as investors park capital for systematic transfer plans (STPs) during sideways markets.
Multi-asset funds: The “one-stop solution” attracting ₹10,000 crore
Multi-asset allocation funds have emerged as the dominant category within hybrids, continuing to attract approximately ₹10,000 crore monthly. Their appeal stems from providing comprehensive diversification in a single product.
Multi-asset has been giving strategic allocation in gold and silver as well, and that is why with one year of equity markets being pretty much flat in terms of returns, hybrids like multi-asset have done
pretty well, Borthakur explained.
The category’s outperformance during flat equity markets has created a positive feedback loop, attracting incremental flows from investors seeking better risk-adjusted returns. Multi-asset funds typically allocate across equities, debt, gold, and sometimes international assets, providing automatic rebalancing and professional asset allocation.
Importantly, multi-asset funds are becoming the preferred entry point for new investors, whether investing directly (DIY) or through distributors. “That is becoming a solution product, like a one-stop solution where you get allocations in all categories and when we talk about diversification it works beautifully there,”Borthakur noted.
Balanced advantage funds roar back with 68% surge
After running relatively flat for several months while multi-asset funds dominated, balanced advantage funds (BAFs) have staged an impressive comeback with a 68% month-on-month increase in inflows.
“Good to see that there has been a spike in that category also,” Borthakur observed. “It is not just the multi-asset this time, it is also the balanced advantage category which was not getting too much of inflows.”
BAFs use dynamic asset allocation models to shift between equity and debt based on market valuations, making them particularly attractive during uncertain market conditions when tactical positioning matters. The revival suggests investors are recognizing the value of rules-based asset allocation during volatile periods.
Arbitrage funds: The parking lot for patient capital
Arbitrage funds witnessed the highest month-on-month growth rate among hybrid categories, reflecting their role as temporary parking destinations during sideways markets. “When there is a sideways market, people would like to park money for deployment over a longer period, so the STP money also gets deployed in arbitrage,” Borthakur explained.
These funds exploit pricing differences between cash and derivatives markets while maintaining low risk, making them ideal for investors planning systematic transfer plans into equity funds. The tax efficiency of arbitrage funds as equity-oriented products adds to their appeal for parking capital.
The underappreciated opportunity: Equity savings funds
While not seeing the dramatic inflows of other hybrid categories, Borthakur specifically highlighted equity savings funds as an attractive option for incremental allocation.
”Equity savings is another very good category where investors can look at from an incremental allocation point of view,” she noted. These funds combine equity exposure with arbitrage and debt components, offering moderate risk profiles suitable for conservative investors seeking equity participation with downside protection.
What these flows tell us about investor sentiment
The flow patterns reveal several key insights about current investor mindset and market positioning:
1. Discipline prevails over panic
SIP flows above ₹31,000 crore demonstrate that retail investors with systematic plans are maintaining discipline despite market volatility. This long-term commitment provides market stability and suggests retail participation remains healthy.
2. Diversification trumps concentrated bets
The dominance of flexicap and multi-asset funds over sectoral/thematic options shows investors prioritizing broad diversification over concentrated theme bets. The tapering of “exciting category” frenzy suggests more mature decision-making.
3. Gold as both hedge and opportunity
The 118% surge in gold ETF inflows reflects dual motivations: hedging equity market uncertainty and capitalizing on gold’s strong performance. Investors are actively managing portfolio risk through strategic gold allocation.
4. Hybrid funds gain respectability
The 61% hybrid category surge, particularly in multi-asset and BAF, indicates investors moving beyond the pure equity mindset toward balanced, all-weather portfolios. Performance during flat equity markets is winning converts.
5. New investors prefer simplicity
Multi-asset funds becoming the entry point for new investors suggests preference for turnkey solutions over building complex portfolios. The “one-stop solution” appeal resonates with those seeking
professional diversification without complexity.
Strategic positioning for current market conditions
Based on these flow patterns, investors should consider:
Maintain SIP discipline: Continue systematic investments regardless of market volatility; time-tested approach showing resilience
Embrace multi-asset solutions: Consider multi-asset or balanced advantage funds for automatic diversification and rebalancing
Add gold exposure: Strategic gold allocation through ETFs or multi-asset funds for portfolio hedging
Use arbitrage tactically: Park capital in arbitrage funds for systematic deployment during market corrections
Favour flexibility: Flexicap funds over rigid market-cap mandates; professional managers need flexibility in uncertain markets
The evolution of investor sophistication
The latest mutual fund flow data reveals an increasingly sophisticated investor base that maintains discipline while actively managing risk. The resilience of SIP flows demonstrates long-term commitment, while the shift toward hybrid funds and gold shows tactical awareness.
Multi-asset funds emerging as the “one-stop solution” particularly for new investors represents a maturation of the market. Rather than chasing hot themes or making concentrated bets, investors are embracing diversified, professionally managed solutions that perform across market cycles.
The dramatic 118% surge in gold ETF inflows demonstrates that investors understand the importance of portfolio hedges beyond just equity-debt combinations. Precious metals are being actively deployed as both defensive positioning and return generators.
As markets navigate uncertainty around trade deals and global economic conditions, these flow patterns suggest investors are prioritizing resilience and diversification over aggressive risk-taking. The SIP heroes remain committed to their long-term plans while tactically adjusting their asset allocation—a balanced approach that should serve them well regardless of near-term market direction.
Disclaimer: This report is based on mutual fund industry data and expert commentary. It is intended for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results. Investors should carefully consider their investment objectives, risk tolerance, and consult with financial advisors before making investment decisions. Mutual fund investments are subject to market risks.