NFO Collections Plummet, SIP Inflows Strong: Q2 2026
By Market Desk
NFO collections hit a 5-year low in Q2 2026, dropping to ₹1,759 crore, while SIP inflows remain robust despite weak market sentiment.
New Fund Offer (NFO) collections by asset management companies (AMCs) registered a five-year low in the June 2026 quarter, falling to ₹1,759 crore. This sharp decline contrasts with the sustained resilience observed in Systematic Investment Plan (SIP) inflows during the same period.
The significant drop in NFO fundraising is attributed primarily to weak equity market sentiment experienced in the preceding quarter. Despite a subsequent market recovery, NFO activity did not rebound.
NFO Performance Metrics
- NFO collections in June 2026 quarter: ₹1,759 crore
- Year-on-year decline: 73%
- Sequential fall from prior quarter: 83.5%
- Total NFOs launched: 31
- Passive funds mobilized: ₹1,024 crore (from 26 index funds and ETFs)
The preceding quarter saw the BSE Sensex fall by nearly 16%, driven by escalating geopolitical tensions. Even with a 5% market recovery during the June quarter, NFO fundraising remained suppressed.
Market Sentiment and NFO Dynamics
Rishi Kohli, Chief Investment Officer at Jio BlackRock Asset Management, highlighted the close link between NFO activity and overall market sentiment. However, Kohli noted that schemes from established AMCs or those offering product differentiation can still attract investor interest even during volatile periods.
The dominance of passive funds in new launches during the June 2026 quarter underscores a shift in investor preference. These funds, comprising 26 index funds and ETFs, collectively mobilized a substantial portion of the total NFO collections.
Systematic Investments Hold Strong
In stark contrast to NFOs, SIP inflows demonstrated remarkable stability, largely unaffected by stock market volatility. This consistent flow highlights investor confidence in disciplined long-term investing.
- April 2026 SIP inflows: ₹31,115 crore
- May 2026 SIP inflows: ₹30,954 crore
- June 2026 SIP inflows: ₹31,781 crore
Swarup Mohanty, CEO of Mirae Asset Investment Managers, attributed the sustained strength in SIPs to the influx of new mutual fund investors. While some existing investors have paused or reduced contributions, Mohanty anticipates continued growth, projecting monthly SIP inflows to reach ₹40,000 crore over the next two years.
The divergent trends between NFOs and SIPs underscore a cautious investor approach to new offerings amid market volatility, while disciplined, systematic investing continues to gain traction.