Flows into equity and hybrid funds moderated on account of market volatility and investor diversification across fund categories
Mumbai: The mutual fund industry's total assets under management (AUM) stood slightly lower at ₹75.18 lakh crore in August compared to ₹75.36 lakh crore in July, according to monthly data released by the Association of Mutual Funds in India (AMFI).
Flows into equity and hybrid funds moderated on account of market volatility and investor diversification across fund categories.
Equity mutual funds recorded net inflows of ₹33,430 crore, 22 percent lower than July 2025’s ₹42,702 crore. Inflows into hybrid funds also moderated to ₹15,293.70 crore from ₹20,879 crore in the previous month.
Debt funds saw an outflow of ₹7,979.84 crore, compared to an inflow of over ₹1.06 lakh crore in July.
However, systematic investment plan (SIP) flows remained strong at ₹28,265 crore, only marginally lower than July's record ₹28,464 crore.
A strategic shift from equities to other categories was visible as inflows into Gold ETFs nearly doubled to ₹2,189.51 crore compared to ₹1,256.09 crore in July. Equity-linked savings schemes (ELSS) also turned positive with ₹59.15 crore in inflows, reversing July’s outflow of ₹368.18 crore.
Other ETFs saw higher allocations at ₹7,244.11 crore versus ₹4,476.91 crore in July. Funds of funds investing overseas also netted ₹500.60 crore, up from ₹196.60 crore last month.
Among equity and hybrid funds, moderation was visible across most categories. The sharpest drop was in sectoral/thematic funds, which saw inflows of ₹3,893.16 crore compared to ₹9,426.03 crore in July.
“One of the key reasons for the cooling enthusiasm is the market itself. Over the past year, the Nifty-50 has delivered near-zero returns, despite its decade-long track record of compounding at 12–13 percent CAGR. For many new-age investors drawn into equities with the promise of double-digit returns, the flat performance has come as a disappointment. The mismatch between long-term equity potential and short-term reality often leads to frustration, particularly among first-time mutual fund participants,” said Hariprasad K, Sebi-registered analyst & founder, Livelong Wealth.
“While equity flows have moderated marginally from ₹42,000 crore to about ₹33,000 crore, a large part of last month’s surge was driven by sectoral categories, with nearly ₹7,000 crore coming from NFOs alone. Hybrids too have eased, with inflows slowing from ₹20,000 crore to around ₹15,000 crore, largely due to arbitrage funds cooling off. That said, SIP numbers remain steady, which is a healthy sign,” said Suranjana Borthakhur, Head - Distribution & Strategic Alliances, Mirae Asset Investment Managers (India).
“Overall, flows suggest that investors are taking a more balanced approach, with diversification across equities, hybrids, and gold gaining ground depending on time horizons and risk appetite,” Borthakhur added.
“These steady flows across equity, hybrid, passive funds, and SIPs underscore the continued confidence of investors in mutual funds as a long-term wealth creation avenue. As an industry, we remain focused on strengthening awareness, encouraging disciplined investing, and ensuring that India’s savers benefit from the transparency and robustness of the mutual fund framework,” said Venkat N Chalasani, Chief Executive, AMFI.
