Mumbai, September 25, 2025: August 2025 marks the 54th consecutive month of positive equity flows, underscoring sustained retail participation.
Following months of robust growth, the Indian mutual fund industry witnessed a cooling phase in August 2025. The Average Assets Under Management (AAUM) declined slightly by 0.38%, settling at Rs. 76.71 lakh crore, down from July’s record peak. Despite this moderation, the industry continued to show resilience, especially in equity and thematic categories.
Open-ended equity mutual funds saw net inflows of Rs. 33,430 crore, a 22% drop from July’s Rs. 42,702 crore. This decline was attributed to profit booking and cautious investor sentiment amid global volatility. However, August still marked the 54th consecutive month of positive equity flows, underscoring sustained retail participation.
Flexi-cap funds led the pack with record inflows of Rs. 7,679 crore, followed by mid-cap (Rs. 5,331 crore) and small-cap funds (Rs. 4,993 crore). Investors showed a clear preference for diversified strategies with higher exposure to mid- and small-cap segments.
Systematic Investment Plans (SIPs) remained a pillar of stability, with monthly contributions holding strong. Retail investors continued to invest consistently, driven by optimism around India’s economic reforms, corporate earnings recovery, and attractive entry points created by market corrections.
Debt funds faced net outflows of Rs. 7,980 crore, compared to a significant improvement from July’s massive inflow of Rs.1.06 lakh crore. Liquid funds saw a sharp reversal with Rs. 13,350 crore pulled out.
Hybrid funds also witnessed reduced traction, with inflows falling to Rs. 15,293 crore from Rs. 20,879 crore in July. Arbitrage funds witnessed maximum inflows, attracting Rs. 6,667 crore, while multi-asset allocation funds maintained steady inflows.
Gold ETFs saw a 74% surge in inflows, reaching Rs. 2,190 crore-the highest in seven months.
In August 2025, the Indian mutual fund industry witnessed a vibrant wave of New Fund Offers (NFOs), reflecting innovation, diversification, and growing investor appetite for passive and thematic strategies. Several Asset Management Companies (AMCs) launched index-based and multi-asset funds, catering to investors seeking low-cost, rule-based exposure to broader markets. This showcased a strategic shift toward passive, thematic, and multi-asset investing, with AMCs responding to evolving investor preferences and market dynamics. The diversity of NFOs offered investors new avenues to align their portfolios with specific goals, risk appetites, and market views. During the month, 11 NFOs were launched under index fund category.
The moderation in flows reflects a strategic pause rather than a loss of confidence. Investors are recalibrating portfolios amid global headwinds, while domestic optimism remains intact. The industry’s resilience is supported by strong SIP flows, diversified fund launches, and increasing retail participation from Tier II and Tier III cities.
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