The markets have been volatile through February; however, SIP flows remained resilient. Leading brokerage house Nuvama said continue to be positive on key Asset Management Companies given the facts as resilient SIPs would help volume growth even as markets continued to consolidate.
Nuvama highlighted that they preferred HDFC AMC, Nippon Life India Asset Management (NAM) and CAMS as top investment picks in the space. Nuvama has set target of Rs 3,620 for HDFC AMC. This implies upside of almost 50% from current levels.
For CAMS, Nuvama has a target price of Rs 850, indicating almost 26% upside potential and Rs 1,130 has been set as target for Nippon Life India Asset Management. This suggests potential upside of 32% for NAM.
Here is a detailed analysis of Nuvama’s investment rationale behind these specific stock picks –
Equity inflows in February
The report by Nuvama noted that SIP supported the inflows in active equity mutual funds.
Active equity mutual funds recorded net inflows of Rs 37,600 crore in February 2026, a 2.1% decline month-on-month. SIP contributed Rs 29,900 crore, which were down 3.7% from the previous month, and lumpsum investments of Rs 7,760 crore, which rose 4.6% month-on-month.
Inflows through existing equity schemes stood at Rs 33,600 crore, falling 10.6% from January, while new fund offers (NFOs) attracted Rs 4,000 crore. During the month, nine active equity NFOs were launched.
For the financial year so far, active equity funds have received net inflows of Rs 4.1 trillion, although this is 11.3% lower compared to the same period last year. SIP investments alone contributed Rs 3.2 trillion, while lumpsum investments stood at Rs 91,600 billion.
Category-wise flows
Among equity categories, large and midcap funds attracted the largest share of inflows at 24.6%. Flexi-cap funds accounted for 18.4%, while small-cap funds received 10.3% of the total active equity inflows. Thematic funds made up 7.9% of the net inflows.
Market performance remained mixed during the month. The Nifty 50 declined 0.56% in February, while the Nifty Midcap 150 Index rose 1.7% and the Nifty Smallcap 250 Index gained 0.75%.
Due to the weak market-to-market impact, active equity assets under management (AUM) grew only 1.6% month-on-month to Rs 44.4 trillion.
Passive fund inflows fall sharply
Nuvama’s report highlighted that passive funds, including ETFs and index funds (excluding overseas funds of funds and gold funds), saw net inflows of Rs 1.396 trillion in February, marking a 65.3% drop from the previous month.
However, passive NFO inflows surged 704.3% month-on-month to Rs 3.8 billion, supported by the launch of 11 new funds compared with five in January.
Meanwhile, gold and overseas funds of funds recorded inflows of Rs 62 billion, down 75.3% from the previous month. Arbitrage funds posted net inflows of Rs 6 billion, compared with Rs 33 billion in January.
Debt funds see continued outflows
Debt mutual fund schemes category recorded outflows of Rs 8,900 billion in February, marking the third straight month of withdrawals.
In contrast, liquid funds witnessed strong inflows of Rs 51,300 during the month.
Conclusion
Nuvama noted that inflows fell slightly in February but that is mainly because markets were volatile. It added that the resilience in SIP flows continues to support the mutual fund industry’s growth despite the market consolidation.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.