Gross equity MF flows hit ₹4 trillion in H1CY26 despite slump in NFOs

Investors opted for proven schemes as the market turmoil continued, say experts

Gross inflows into active equity mutual fund (MF) schemes remained elevated in the first half (H1) of 2026, even as new fund offer (NFO) collections plunged to a six-year low.

 

At ₹4.07 trillion, gross inflows were just shy of the record ₹4.34 trillion mobilised in H2 of 2024, making it only the second half-yearly period in which inflows crossed ₹4 trillion.

 

The resilience was driven by a steady rise in systematic investment plan (SIP) contributions and strong lumpsum investments into existing schemes. This more than compensated for the sharp slowdown in NFO mobilisation.

 

NFO collections plunged to ₹7,092 crore in H1 of 2026 from ₹22,026 crore in H2 of 2025 and over ₹53,000 crore in H2 of 2024.

 

Consequently, NFOs accounted for only 1.7 per cent of gross active equity inflows during the period, the lowest share in at least six years.

 

According to MF executives, data suggests that investors opted for proven schemes in diversified categories in 2026. This compares to betting on new launches in the thematic space in previous years.

 

“Flows have held up on an aggregate basis, but one can clearly see that NFOs have dried up and money has gone into existing schemes. Most of the NFOs launched in 2023 and 2024 were aggressive sectoral and thematic funds, many of which have disappointed. In contrast, diversified flexicap, multicap and even midcap funds have held up much better. Several of them delivered healthy positive returns over the past two years despite markets going nowhere,” said Aashish Somaiyaa, chief executive officer (CEO), WhiteOak Capital Asset Management.

 

Flexicap, smallcap and midcap funds attracted bulk of the net inflows in H1 of 2026. The three categories together cornered nearly 60 per cent of the total H1 net inflows of ₹1.8 trillion.

 

A sharp rise in lumpsum investments into existing schemes has been a key factor behind the resilience in equity inflows.

 

An analysis of gross active equity inflows through different channels — SIPs, lumpsum investments and NFOs — shows that estimated lumpsum inflows rose to ₹2.5 trillion in H1 of 2026. This is the second highest for any half-yearly period, after peaking at ₹2.6 trillion in H2 of 2024.

 

The lumpsum inflows are estimated by assuming that active equity schemes accounted for 80 per cent of the industry's total SIP contributions during the period.

 

The net equity inflows stood at ₹1.8 trillion in H1 of 2026, 5 per cent lower than the previous six-month period.