Sectoral, Thematic Fund Inflows Plunge 88% in January: ICRA Analytics

• Net inflows into sectoral and thematic mutual funds dropped 88.44% year-on-year to ₹1,043 crore in January 2026.
• Their share in total net inflows of open-ended equity-oriented funds fell to 4.34% from 22.72% a year earlier.
• ICRA Analytics attributes the decline to underperformance, cyclical reversals, and investors reassessing concentrated thematic allocations.
• Heightened volatility in mid-cap and small-cap segments, along with macroeconomic concerns, dampened investor appetite.
• While the category remains volatile, select themes with government policy backing and structural economic drivers may retain long-term potential.