Passive funds attract Rs 1.29 lakh crore net inflows in FY26

Passive funds, including ETFs and index funds, have drawn Rs 1.29 lakh crore in net inflows in the year to date of FY26, with ETFs alone accounting for Rs 1.07 lakh crore, data from the National Stock Exchange shows. Assets under management of passive funds rose 24.4% year-on-year to Rs 15.15 lakh crore at the end of July 2026, now making up 18% of the mutual fund industry's total AUM. Fund managers attribute the shift to lower costs, wider product ranges covering sectors and international markets, and growing investor awareness that consistently beating an index is difficult.

A separate report from the Association of Mutual Funds in India and Crisil highlights that women investors have tripled their gold ETF investments in a year. Gold ETFs now account for 16.4% of women's passive fund portfolios as of March 2026, up from 6.4% a year earlier. Gold ETF net inflows stood at Rs 0.69 lakh crore in FY26, more than double the cumulative inflows of the previous five financial years combined. The report notes that women's total mutual fund AUM rose to Rs 15.88 lakh crore in March 2026 from Rs 5.84 lakh crore in March 2021.

Livemint reports that despite the passive surge, actively managed equity funds continue to outperform their peers in mid- and small-cap categories in India. The SPIVA India 2025 report found that over 75% of large-cap active funds underperformed their benchmarks, but fewer than 20% of mid- and small-cap active funds did so. Experts suggest a core-satellite strategy combining active and passive investments, with passive funds gaining a stronger case in large-caps while active management retains an edge in less efficient segments.