Indian Mutual Funds: 731 Schemes Report Losses in FY26

Indian mutual fund schemes saw a significant downturn in Fiscal Year 2026, with the number of funds reporting negative annual returns tripling to 731 from 243 in the previous fiscal year, according to Whalesbook and SEBI data.

Key Performance Metrics FY26

• Negative Schemes: 731 (up from 243 in FY25)
• High-Performing Funds (>10% returns): Dropped to 198 (from 304 in FY25)
• Common Loss Range: 0% to -5%

This surge in schemes registering losses, primarily between 0% and -5%, highlights how market volatility significantly eroded investor gains over the 12-month period. Even funds delivering over 10% returns declined, indicating broad-based performance challenges.

Industry Growth & Investor Engagement

• Assets Under Management (AUM): Reached ₹73.73 lakh crore by March 2026
• AUM Increase: 12.2% from previous fiscal year
• Unique Investors: Grew by 13.2% to 6.1 crore
• Tier-II City Participation: Saw a 37.6% rise
• Contributing SIP Accounts: Climbed to 10.45 crore

Despite the performance headwinds, the industry demonstrated resilience in total assets. This growth in Assets Under Management is primarily attributed to sustained retail participation and the consistent popularity of Systematic Investment Plans.

Inflow-Outflow Dynamics & Investor Alerts

• Redemptions: Increased by 16.5%
• Overall Net Inflows: Declined 9.7% to ₹7.4 lakh crore
• Unclaimed Dividends: Rose 15.7% to ₹2,689 crore by FY26 end

The disparity between AUM growth and scheme performance suggests a shift in investor behavior, with redemptions increasing even as fresh capital flowed in. This indicates some investors chose to exit or book losses amid the observed volatility.

Investors must monitor monthly SIP contribution trends and redemption rates in quarterly updates to gauge ongoing retail commitment. This will be crucial as the industry navigates future market conditions.