Market shifts: Where smart money is flowing in volatile markets now.

₹26,000 crore, lower than ₹33,400 crore in August 2025 and higher than ₹24,000 crore in January 2026. Within equity, the category getting the highest flows, as a trend, is flexi-cap funds. In February 2026, inflows to flexi-cap funds were approximately ₹7,000 crore out of the ₹26,000 crore mentioned earlier.

Flexi-cap is the category where there is no regulatory mandate on the market-cap-wise distribution of stocks in the portfolio; it is the fund manager's discretion.This flexibility gives investors a free hand and lets them leverage their chosen manager's skills. This is a positive trend, as investors are preferring not to bind the fund manager to market-cap boundaries or to avoid sector- or theme-specific funds that carry higher risk.The category that is consistently losing corpus is the equity-linked savings scheme (ELSS) funds. The rationale here is different.

The appeal of ELSS was the tax savings under Section 80C. Now that most income tax payers, say 70% to 80%, have shifted to the new tax regime, ELSS funds are seeing redemption as the three-year lock-in period opens up.It has been proven that in times of volatility, such as the current period, a multi-asset strategy performs best on a risk-adjusted basis. Different asset classes, such as equity, debt, and gold, exhibit negative or low correlation.

When one asset is beaten down, another one provides stability to the portfolio. While you can always allocate yourself through pure-play equity, debt, and gold funds, multi-asset funds have an advantage: tax efficiency. A mutual fund, being a tax-free entity, does not pay taxes on capital gains.