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Commodity Fund Inflows Crash 89% in Feb as Gold Mania Fades

Commodity fund inflows collapsed by approximately Rs 45,708 crore in February 2026, marking an 89% monthly decline as the frenzy around gold subsided. Overall net asset flows nearly halved from January, with money market flows also cooling sharply by about 45%. While equity flows moderated, there was notable dip-buying activity in Mid-Cap and Small-Cap segments, which saw inflows increase against the broader trend. The report from Vallum Capital indicates a mean-reversion from January's extremes, with fixed income continuing to experience steady outflows.

Key Points: Commodity Fund Inflows Plunge Rs 45,708 Crore in February

  • Commodity flows plunged 89% monthly
  • Equity flows moderated by 19%
  • Mid & Small-Cap segments saw dip-buying
  • Fixed income outflows remained entrenched
2 min read

Commodity inflows plunge Rs 45,708 crore in Feb; lead annual return

Commodity fund inflows fell 89% in Feb 2026 as gold cooled, while equities held relatively firm and fixed income outflows persisted.

"February shows January extremes mean-reverting - gold mania cooling, money market normalising - Vallum Capital report"

New Delhi, March 18

Commodity fund inflows plunged by Rs 45,708 crore in February 2026, even as the asset class overtook peers with an 80.3 per cent annual return, a report said on Wednesday.

"Commodity flows collapsed as gold mania faded, while the money market cooled sharply. Fixed income continued steady outflows, whereas equity flows held relatively firm," the report from Vallum Capital said.

The total net asset level flows nearly halved from Rs 1,64,277 crore in January to Rs 73,842 crore in February.

Commodities saw net fund flows decline from Rs 51,483 crore in January to Rs 5,774 crore in February, a drop of about 89 per cent, while money market flows fell to Rs 42,970 crore, down about 45 per cent, the report said.

Equity flows moderated from Rs 52,110 crore to Rs 42,017 crore on monthly basis, marking a decline of about 19 per cent.

Fixed income net outflows narrowed slightly from Rs 17,037 crore to Rs 16,919 crore.

In the commodities sector, gold correction as well as silver saw a sharp dip in February after January's surge, marking sharpest single-month flow reversal across all asset classes.

"February shows January extremes mean-reverting - gold mania cooling, money market normalising, dip-buying emerging in mid/small caps and tech - while fixed income outflows remain entrenched," the report noted.

Broad market equity funds moderated to Rs 27,254 crore from Rs 30,359 crore. Large-Cap eased to Rs 9,316 crore from Rs 11,007 crore but remained dominant.

Notably, Mid-Cap and Small-Cap stocks moved against the trend as the former asset class rose to Rs 3,739 crore from Rs 3,297 crore and latter to Rs 3,055 crore from Rs 2,536 crore, signalling dip-buying in beaten-down segments.

Factor funds accelerated to Rs 4,495 crore from Rs 3,116 crore, led by quality at Rs 2,261 crore (from Rs 125 crore) on the back of a new NFO launch absorbing over half the category.

- IANS

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Reader Comments

R
Rohit P
My mutual fund SIPs are in large-cap and flexi-cap funds. This data shows why staying the course is important. These monthly swings are noise. The dip-buying in mid/small caps is interesting, but too risky for my portfolio. Fixed income outflows are worrying though.
A
Aditya G
Gold correction was bound to happen. Everyone and their bua was buying gold ETFs in Jan. Now the smart money is moving elsewhere. The rise in factor funds, especially 'quality', shows a shift to more sophisticated strategies. Retail investors should take note.
S
Sarah B
As an NRI tracking Indian markets, this is fascinating. The sheer scale of the reversal in commodity flows (Rs 45,708 crore!) shows how sentiment-driven the market can be. The resilience of equity inflows, even if moderated, is a positive sign for India's growth story.
K
Karthik V
Respectfully, reports like this often just state the obvious after the fact. Where was the warning about "gold mania" in January? Retail investors get caught in these hype cycles. Regulators and advisors need to do better in managing expectations. 📉
M
Meera T
The move into mid and small caps is the key takeaway. When large caps are expensive, money finds its way to other segments. This "dip-buying" shows confidence in the broader market. Hopefully, this isn't just short-term speculation but genuine investment.

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