Domestic mutual funds made significant portfolio shifts in April 2026, increasing allocations to banking, FMCG and healthcare sectors while continuing to witness strong investor flows into flexi-cap schemes, according to Ambit Capital's report on mutual fund portfolio activity.
Active sector repositioning
According to Ambit's analysis, BFSI, FMCG and Healthcare recorded the highest mutual fund buying activity in April after adjusting for sector performance. On the selling side, Auto, Utilities and Consumer Durables saw net selling pressure. The report noted that sector allocations shifted noticeably in April, with Capital Goods recording the sharpest rise in fund weights at 78 basis points, followed by Utilities at 19 basis points and FMCG at 16 basis points. IT fell 60 basis points, Healthcare declined 26 basis points and Oil & Gas dropped 19 basis points.
Flexi-cap leads fund flows
Flexi-cap funds recorded the highest net inflows at 101 billion rupees in April, followed by small-cap funds at 69 billion rupees and mid-cap funds at 66 billion rupees. The strong flows into diversified equity products reflect investor preference for flexibility in market exposure. However, SIP inflows showed moderation, declining to 311 billion rupees, though net equity inflows rose marginally to 434 billion rupees compared with 432 billion rupees in March.
Individual stock moves
Among top purchases, Eternal emerged as the largest large-cap buy with mutual funds acquiring 0.9% of total shares outstanding. In the mid-cap category, Poonawalla Fincorp led with purchases equivalent to 4.2% of shares outstanding. Indraprastha Gas topped small-cap buying with 2.5% of outstanding shares acquired. Other significant buys included ICICI Bank, SBI, Adani Ports & SEZ and Max Healthcare Institute. On the selling side, Wipro, Mahindra & Mahindra Financial Services and Apollo Pipes saw the largest sales across large-, mid- and small-cap categories.
Structural industry shifts
The mutual fund industry is undergoing a longer-term transition toward equity-led investing. Equity assets under management increased 11.9% to 33.9 trillion rupees in April, while cash allocations declined. Cash as a percentage of total AUM fell to 5.5%. Since April 2020, the share of equity funds in total AUM has risen from 36% to 52%, while the share of debt funds has declined from 55% to 28%. Individual ownership has also climbed from 44% to 60% over the last decade, reflecting deeper retail participation in mutual fund investing.