Continuous fluctuations and high valuations in the stock market have changed the confidence of Indian investors. The mantra of ‘risk hai to ishq hai’ now seems to be fading and investors have started adopting the strategy of ‘safety first’. Mutual fund data for January 2026 is testifying that investors have stepped back from equity (stock market) and have now made gold (Gold ETF) and debt funds their new destination.
Equity declined for the second consecutive month
According to the latest data released by the Association of Mutual Funds in India (MAFI), the enthusiasm for investing in equity mutual funds is cooling down. Net investment in actively managed equity funds has declined to Rs 24,028.59 crore in January 2026.
This decline is not normal, as it has decreased by about 14% compared to Rs 28,054.06 crore in December 2025. This is the second consecutive month when the pace of equity investment has slowed down. Experts believe that due to high market levels and uncertainty, investors are now being extremely cautious in investing new capital.
Gold ETF broke records
While on one hand money is coming in from the stock market (equity), on the other hand money is pouring into gold ETFs which are considered ‘safe investments’. Investments in gold ETFs doubled to a record Rs 24,040 crore in January, from just Rs 11,647 crore in the previous month.
This change is also significant because in January, equity benchmark Nifty50 saw a decline of 3.1% and Sensex fell by 3.5%, while in contrast, bullion (gold and silver) prices recorded a rise of up to 24% in the domestic market. Investors are turning to gold to balance their portfolio in a falling market.
Strong comeback of debt and hybrid funds
Apart from equity, money is now going into debt funds (debt schemes) also. While Rs 1.32 lakh crore was withdrawn from debt funds in December, the tables were turned in January and a huge investment of Rs 74,827.13 crore came in.
Apart from this, investor confidence in hybrid schemes (which are a mix of equity and debt) has also increased. Investments in hybrid funds stood at Rs 17,356.02 crore in January, which was much higher than Rs 10,755.57 crore in December.
Trust in SIP still persists
Even though the lump sum investment figures may be worrying for equities, the long-term confidence of small investors has not wavered yet. According to the data, the contribution of the Systematic Investment Plan remained stable at Rs 31,002 crore in January also. This shows that retail investors are not stopping their regular investments out of fear of the current market volatility.
The January figures clearly indicate that Indian investors are now maturing. They are focusing on asset allocation instead of just chasing market momentum. The fall in equities and the surge in gold-debt funds suggest that ‘caution’ is the best strategy in the market right now.
