Flexicap funds take lead in FY26 as midcap, smallcap inflows cool

Flexicap funds top FY26 inflows as investors shift from mid- and smallcaps to diversified and multi-asset strategies amid market volatility

Flexicap funds, the largest mutual fund category, emerged as the most popular offering in financial year 2025-26 (FY26). These diversified equity MF schemes raked in nearly ₹90,000 crore last year, 16 per cent higher than the ₹76,860 crore tally in FY25. 

Meanwhile, smallcap and midcap funds, which garnered the highest investor interest in the previous two years, got pushed lower in the pecking order. Smallcap fund inflows were down 39 per cent in FY26 at ₹51,872 crore, while net investments into midcap funds shrunk 31 per cent. 

Multi-asset funds emerged as the biggest gainers as inflows more than tripled to ₹65,200 crore. The category, which invests across equity, debt and commodities, managed to outperform equity schemes by a big margin, on the back of its gold and silver exposure. 

Gold exchange traded funds (ETFs) and silver ETFs also witnessed a sharp rise in inflows. 

The top 10 most popular funds list for FY26 also includes large & midcap funds, and multicap funds, as they managed to garner around 30 per cent higher inflows. Other scheme categories in the top included sectoral and thematic funds, largecap funds and balanced advantage funds. These schemes made the cut despite a sharp decline in net inflows. 

Equity linked savings schemes (ELSS), which have been losing sheen post the introduction of new tax regime, ended the year with ₹5,857 crore net outflow. 

Dividend yield funds and conservative hybrid funds also recorded net outflows.