Mutual Fund SIP Hits 4-Month-Low in March Amid Market Volatility; THESE Funds Delivered Positive Returns

Mutual Fund inflow declined 14.4% to Rs 25,08 crore in March, indicated the Association of Mutual Funds in India. Additionally, the Systematic Investment Plan (SIP) inflow fell for the fourth consecutive month in March to Rs 25,926 crore.

The declining participation in mutual fund investment indicates dropping investors' interest in the equities amid persistent stock market volatility. While most of the mutual funds gave negative returns over the past few months, certain mutual funds schemes have gained spotlight by delivering positive returns since 2025.

Equity Mutual Funds Slump 14% in March

A month after facing a sharp decline in mutual fund equity inflows in February, mutual fund investment fell further in March as investors panicked amid geopolitical uncertainty due to Donald Trump's trade tariff announcement. In February, there was a 26% fall in equity mutual fund inflow. Inflows into equity fell nearly 36.8% over two months. Inflow in large-cap mutual funds declined by nearly 2479 crore, whereas inflows into small caps increased from Rs 3722 crore to Rs 4092 crore.

MF Investment Redemption Went Up By 25%

There was a significant decline in mutual fund investment redemption in the small cap flows. However, redemption went up most in large-cap mutual funds.

"The redemptions went up most in Large Caps (54% higher than last month) besides sectoral and thematic (55% higher than last month). Small Caps saw a dip in redemptions (15% less than last month). Volatility could also not save Balanced Advantage funds which also saw 30% increase in redemptions compared to last month despite the positioning of BAF funds as best during volatility. Yet, redemptions were less compared to all 7 months between Apr 2024 to Oct 2024," noted Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC

What's The Reason Behind Declining Mutual Fund Inflow?

One of the major factors behind the declining mutual fund inflow in February and March was profit booking, however, April outflows would be a better indicator of understanding market sentiment.

"We believe, profit booking were a major contributor. April outflows would be a better indicator to watch for gauging investor sentiment. We believe April is an opportunity for investors to increase their equity allocations and also expect redemptions to come down in April. Selling in debt at the shorter end is mostly on account of advance tax and year-end considerations. At long end, investors seem to have booked profits after the recent rally in long-dated bonds," added Chaturvedi.

"Some investors are capitalizing on deep-value opportunities in the small- and mid-cap segments, while others are opting for the relative stability of large-cap stocks," Devang Kabra, Partner and Co-Fund Manager at Wallfort PMS told news agency Reuters.

Which Mutual Funds Emerged As Top Performers Despite Decline?

According to an Economic Times report, 97% of equity mutual funds have offered negative returns since the beginning of 2025. HSBC Brazil Fund, Edelweiss Europe Dynamic Equity Off-shore Fund, Mirae Asset Hang Seng Tech ETF FoF emerged as the top mutual funds which gave positive returns in 2025, according to ET report.

As per ET report, HSBC Brazil Fund gave highest of 8.3% of returns, whereas Edelweiss Europe Dynamic Equity Off-shore Fund offered 7.34% returns, and Mirae Asset Hang Seng TECH ETF FoF firm gave 6.38% return. ICICI Pru Strategic Metal and Energy Equity FoF mutual fund gave a return of 4.48% since the beginning of 2025.

Additionally, Nippon India Taiwan Equity fund, Samco Flexi Cap Fund, Shriram Multi Sector Rotation Fund, and Invesco India Technology Fund emerged as the worst performing mutual fund schemes.