SIPs in hybrid, multi-asset schemes to drive retail flows in 2026
Driven by a desire for diversification following a period of equity consolidation and stellar returns in gold and silver, retail investors are expected to shift toward hybrid and multi-asset schemes to hedge against volatility.
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Mumbai: Despite equity markets remaining muted, systematic investment plans (SIPs) are set to drive the retail mutual fund assets under management (AUM) next year, with most of the flows expected to go towards hybrid and multi-asset schemes.
Within equity and hybrid mutual funds, 27% of the assets under management are contributed by retail investors, who are defined as those investing less than ₹2 lakh. The SIP flows primarily come from retail investors, whereas bigger investors use the lump-sum route.
As of September, the retail equity and hybrid mutual fund AUM stands at ₹19 trillion, as per Association of Mutual Funds of India (Amfi), 25% of the overall assets. Debt mutual funds were not considered here as they have assets coming from corporates and institutions.
Although investments in equity mutual funds have declined so far this year compared to last year, experts foresee steady growth through SIPs. Net inflows into equity mutual funds were at ₹3.5 trillion in the first 11 months of 2025, while they dipped to ₹3.2 trillion in the first 11 months of 2024, as per Amfi.
SIP flows have remained steady at around ₹30,000 crore a month, and are expected to remain at the same level or even rise next year, said Harsha Upadhyaya, chief investment officer (CIO) - Equity, Kotak Mutual Fund.
“We estimate 7–8% growth in gross collections in SIP next year, translating into ₹60,000 crore incremental SIP inflow next year," said Juzer Gabajiwala, director of trading and investments platform Ventura.
Nikunj Saraf, chief executive, Choice Wealth, a wealth and financial services provider, said that Indian households are now contributing close to ₹29,000–30,000 crore every month, a level that has created a structural floor under equity MF flows. This sticky, long-term money will continue irrespective of market volatility.
The industry does not believe that lower inflows mean waning investor interest.
A lower inflow into equity mutual funds compared to last year is not a withdrawal of interest, but rather a period of consolidation following exceptionally strong equity market performances, said Vaibhav Shah, head of products, business strategy, and international business at Mirae Asset Investment Managers (India).
Shah added that as macro conditions stabilise, the earnings outlook becomes clearer, and equity flows are expected to grow at a faster pace.
Where will the flows go?
Most of the flows are expected to go to multi-asset and hybrid funds, as investors seek diversification, according to experts.
The year 2026 will be when investors might allocate more to multi-asset and hybrid funds, experts said. The move comes on the back of weak returns from Indian equity markets and strong outperformance from other asset classes, such as gold and silver.
Year-to-date, the Nifty 50 and Sensex have delivered returns of 10.87% and 9.7%, respectively. While the MCX gold and silver have given returns of 65% and 89%, respectively.
- Retail SIP flows have created a ‘structural floor’ of about ₹30,000 crore per month, shielding the industry from extreme volatility.
- The year 2026 is expected to see a significant rotation from pure equity into hybrid and multi-asset funds.
- Massive returns in gold and silver compared to modest equity gains (9–10%) are driving the demand for diversification.
- Investors are moving toward multi-asset funds to avoid the tax hurdles and ‘timing risks’ associated with manual rebalancing.
- Experts anticipate a 7–8% growth in gross SIP collections, potentially adding ₹60,000 crore in incremental inflows next year.
Anil Ghelani, head - Passive Investments and Products at DSP Mutual Fund, said that the last 12 to 18 months have put a spotlight on asset allocations, where Indian equities have given flat to negative returns, but global equities, debt and commodities have performed well.
“Many financial advisors as well as investors are increasingly realizing that it is difficult to rebalance funds across different asset classes due to the right timing as well as tax impact on gains, and hence, besides equity, one will see a strong surge of flows into hybrid and multi-asset funds," Ghelani said.
Gabajiwala noted that more money will likely flow into multi-asset funds as investors seek ways to spread their risk and balance their portfolios. While hybrid funds as a category are expected to grow, investors continue to prefer balanced risk-return solutions amid market uncertainty.
Kartik Jain, MD & CEO, Shriram AMC, also expects most flows in 2026 to shift into broad-based equity funds, passive funds such as exchange-traded funds or index funds, and hybrid funds.
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