The latest AMFI data from January reminds us that mutual fund investing remains largely hindsight-driven. Surprisingly, net inflows into Gold ETFs were marginally higher than net flows into equity-oriented schemes. Investors continue to chase the winners of 2025 instead of identifying new opportunities.
Market weakness in January, coupled with gold’s stellar run in 2025, should have prompted investors to reassess their asset allocation. Instead, many poured money into gold and silver funds. Even as precious metal prices have cooled from their highs, investors seem convinced this remains a safe bet.
On the equity side, net flows tell an interesting story. While sectoral and thematic funds attracted significant gross inflows (~11,000 Crores), they also witnessed strong outflows (~10,000 Crores). This churn reflects how capital often chases the wrong segments of the market. Investors who jump into trending themes frequently find themselves shortchanged a few months later.
Although overall SIP flows remain stable, the SIP stoppage ratio—while improving from 84% in December to 75% in January—remains elevated. This kind of churn undermines the benefits of compounding and cost averaging.
2026 seems to be a challenging investing year. On one hand, investors must prioritize security and on the other, more opportunities will open up. In this context, the choices we make will matter far more. The ghosts of past performance may still haunt portfolios, but will they help construct enduring wealth?
