As the calendar turns to 2026, India's retail mutual fund landscape is poised for a significant transformation. Driven by a quest for diversification after a period of equity market consolidation and spectacular rallies in gold and silver, systematic investment plan (SIP) flows are expected to remain the bedrock of retail participation. However, the destination for these flows is shifting markedly towards hybrid and multi-asset schemes, as investors seek to hedge against volatility.
The Unshakeable SIP Floor and Steady Retail Confidence
Despite muted equity market performance, the SIP engine for retail mutual funds shows no signs of stalling. Data reveals a robust structural foundation: retail SIP contributions have created a steady floor of approximately ₹30,000 crore every month. This persistent inflow, primarily from investors putting in less than ₹2 lakh, forms a critical buffer against market swings.
Harsha Upadhyaya, CIO - Equity at Kotak Mutual Fund, confirms that SIP flows have held steady around this monthly figure and are anticipated to maintain or even increase in the coming year. This sentiment is echoed by Juzer Gabajiwala of Ventura, who projects a 7–8% growth in gross SIP collections for 2026. This growth could translate into an impressive incremental inflow of ₹60,000 crore through SIPs alone next year.
Industry experts are quick to clarify that a relative dip in net equity inflows—from ₹3.5 trillion in the first 11 months of 2025 to ₹3.2 trillion in the same 2024 period—is not a sign of waning interest. Vaibhav Shah of Mirae Asset Investment Managers (India) describes it as a period of consolidation following exceptionally strong past performances.
The Great Rotation: Why Hybrid and Multi-Asset Funds Are Gaining Favour
The defining trend for 2026 is the expected rotation of retail money from pure equity schemes into more diversified offerings. The primary catalyst for this shift is the stark divergence in returns across asset classes. While the Nifty 50 and Sensex have delivered modest returns of around 10% year-to-date, MCX gold and silver have skyrocketed, giving returns of 65% and 89% respectively.
This outperformance has spotlighted the importance of asset allocation. Anil Ghelani of DSP Mutual Fund notes that the last 12-18 months have seen flat-to-negative returns from Indian equities, while global equities, debt, and commodities flourished. This experience is driving a practical realization among both investors and financial advisors.
Managing manual rebalancing across asset classes is fraught with timing risks and tax inefficiencies. To avoid these hurdles, investors are increasingly turning to ready-made solutions. Hybrid and multi-asset funds, which automatically allocate across equities, debt, gold, and sometimes international assets, offer a disciplined, tax-efficient approach to diversification.
Expert Consensus and Future Flow Patterns
The industry consensus strongly points towards hybrid and multi-asset categories being the primary beneficiaries of the 2026 SIP wave. Kartik Jain of Shriram AMC anticipates flows shifting into broad-based equity funds, passive funds like ETFs, and notably, hybrid funds.
Gabajiwala reinforces this, stating that more money will flow into multi-asset funds as investors actively seek to spread risk and balance their portfolios. The underlying theme is a search for balanced risk-return solutions amid ongoing global and domestic uncertainty.
As of September 2025, retail assets in equity and hybrid mutual funds stood at a substantial ₹19 trillion, accounting for 25% of the industry's overall assets under management, according to AMFI. This vast pool, now more educated by recent market cycles, is set to drive the next phase of growth in a more nuanced, diversified direction.
In summary, 2026 is shaping up to be the year where the Indian retail investor's journey matures from a singular focus on equities to a more sophisticated, multi-asset strategy, all powered by the relentless and growing discipline of systematic investing.
