Urban Indian High Net Worth Individuals Expected to Increase Mutual Fund Investments by 33%: UBS Poll

Indian Equity Mutual Fund Net Inflows Contract 14% in January

Net inflows into Indian equity mutual funds contracted 14% month-on-month to Rs 24,029 crore in January 2026, according to the latest data from the Association of Mutual Funds in India (AMFI). This decline was driven by large-cap redemptions and Rs 30,917 crore in year-to-date foreign investor outflows through March 5.

Despite this, household equity allocations remain strong, with 15-20% of total financial assets allocated to equities, a level on par with developed markets. UBS Evidence Lab conducted a survey of 1,614 urban consumers, which highlighted a countervailing force from affluent households. Among those planning equity investments over the next 12 months, 33% in the top socio-economic class (SEC A) favour mutual funds, while 24% target systematic investment plans (SIPs).

Equity Preferences Skew Affluent

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The survey also showed that affluent households (SEC A) have a strong preference for direct stocks, with 18% of respondents eyeing this option, compared to 8% in SEC B and 2% in SEC C. This is consistent with households' 15-20% equity allocation to assets, which is now on par with developed markets.

Macro Pillars Remain Firm

UBS's outlook for India remains positive, with nominal GDP expected to expand to $4.1 trillion in FY27 and $4.5 trillion in FY28. Per capita income is expected to reach $2,858 in FY27 and $3,084 in FY28. Consumption, capex, and exports are expected to grow at 7.1%, 7.0%, and 6.8% respectively in FY27.

Gold Hoarding Ramps Up

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Gold remains a popular investment option, with 54% of respondents expecting higher demand for bullion and silver in the next 12 months. This could lead to steady FY27 imports of 650 tonnes, largely driven by investment demand. UBS forecasts annual average prices at $5,200 per ounce, which could widen the current account deficit to $37 billion, or 1.0% of GDP, in FY26.

Credit Ratings Remain Stable

Credit ratings remain stable, with S&P rating India at BBB. The balance of payments shows a $47 billion current account gap in FY27, buffered by $10 billion in projected FDI inflows.