AMC Sector Faces Near-Term Pressure As Equity Flow Share Fragments
Add Preferred News Source
Equity flows are becoming less concentrated among the largest mutual fund players as investors favour mid-cap, small-cap, flexi-cap and multi-asset categories. While listed AMCs face weaker near-term earnings growth, the sector is expected to see a gradual improvement in profitability over the medium term.
Listed asset management companies (AMCs) are under near-term pressure. Weak equity returns have hurt their share of net equity flows, according to a research note. The shift has made the mutual fund industry more fragmented. Core earnings growth is also expected to stay subdued in FY27.
From April to July 2026, the top three players captured 34% of net equity flows. That was 42% in FY26. The top 10 saw their share fall too, to 65.1% from 72.8%. More investor money is reaching a broader set of players.
Large-cap equity returns were relatively subdued. Mid-cap and small-cap stocks performed better. By August 2026, the mutual fund industry had ₹87.1 trillion in closing assets under management (AUM). The base remains large, even as the flow pattern changes.
Where Are Mutual Fund Flows Moving?
Investors' allocations have moved from sectoral/thematic and large-cap funds to categories that have delivered better returns in the recent past.
Large-cap | 7% |
Flexicap | 13% |
Multicap | 17.9% |
Large & midcap | 17.5% |
Midcap | 25% |
Smallcap | 29% |
The broader equity market has also seen a divergence, with the Nifty 50 down 0.8% since March 2025, while the Nifty 100, BSE 200 and BSE 500 gained 2%, 3.5% and 6.5%, respectively.
Earnings Outlook Remains Positive
Core profit after tax growth for the sector is estimated at around 10% year-on-year in FY27. Despite the softer near-term outlook, core PAT is still expected to grow 16% CAGR over FY27-29. That points to a recovery in profitability as operating conditions improve.
Also Read - 5 Commodity Stocks That Hit 52-Week Highs And Rallied Up To 174% In A Month
This article is for informational purposes only and should not be considered investment advice from Kotak Neo. For compliance T&C and disclaimers, Visit www.kotakneo.com/disclaimer
Vishwa has spent 10+ years across fintech and FMCG doing what most people miss, connecting the dots, catching trends before they trend, and finding the angle nobody else thought to ask about.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide, turning market noise into something worth reading.
When she's not decoding markets, she trades charts for canvases, chasing art, painting, and architecture across cities she's yet to explore.
Right Tools, Rich Insights
