Commodity Fund Inflows Plunge in February Despite Strong Returns; Equity Flows Stay Resilient
Commodity Flows Drop Sharply as Gold Rally Loses Momentum
Commodity fund inflows witnessed a steep decline of ₹45,708 crore in February 2026, even as the asset class delivered a strong annual return of 80.3 percent, according to a report released on Wednesday.The report highlighted that the sharp correction in flows was largely driven by cooling interest in gold after a surge in January. Commodity inflows fell drastically from ₹51,483 crore in January to ₹5,774 crore in February, marking a decline of nearly 89 percent.
Overall Fund Flows Nearly Halve Month-on-Month
Total net asset-level inflows across categories dropped significantly, falling from ₹1,64,277 crore in January to ₹73,842 crore in February.The broader trend indicates a normalization following elevated inflows in the previous month, with multiple asset classes witnessing reduced activity.
Money Market and Fixed Income See Continued Weakness
Money market flows also recorded a sharp decline, dropping about 45 percent to ₹42,970 crore in February.Fixed income funds continued to see outflows, although the pace of decline showed marginal improvement. Net outflows in this segment stood at ₹16,919 crore compared to ₹17,037 crore in January.
Equity Flows Moderate but Remain Stable
Equity mutual fund inflows remained relatively stable despite a moderation. Monthly inflows declined by around 19 percent, from ₹52,110 crore in January to ₹42,017 crore in February.Within equities, broad market funds saw inflows ease to ₹27,254 crore from ₹30,359 crore. Large-cap funds remained the dominant category, though inflows dipped to ₹9,316 crore from ₹11,077 crore.
Mid and Small Caps Attract Dip-Buying Interest
In contrast to the broader trend, mid-cap and small-cap funds recorded an uptick in inflows, signaling a dip-buying strategy among investors.Mid-cap inflows rose to ₹3,739 crore from ₹3,297 crore, while small-cap funds attracted ₹3,055 crore compared to ₹2,536 crore in January.
Factor Funds Gain Momentum on New Launches
Factor-based funds saw increased traction during the month, with inflows rising to ₹4,495 crore from ₹3,116 crore.This growth was primarily driven by quality-focused funds, which surged to ₹2,261 crore from ₹125 crore, supported by a new fund offer that accounted for a significant portion of the category inflows.
February Marks Reversal of January Extremes
The report noted that February trends reflect a reversal of the extreme movements seen in January. The easing of the gold-driven rally, normalization in money market flows, and selective buying in beaten-down equity segments shaped the overall investment landscape during the month.Disclaimer: Due care and diligence have been taken in compiling and presenting news and market-related content. However, errors or omissions may arise despite such efforts.
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