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Summary: In August 2025, mutual fund inflows moderated as both equity and hybrid schemes drew less money compared to July’s record highs, reflecting a pause in momentum amid weaker market performance. Still, equity funds logged their 54th straight month of positive flows, supported by steady SIP contributions and continued investor interest in flexi-cap, mid-cap and small-cap categories.
Indian mutual funds witnessed lower net investments in August 2025, as both equity and hybrid schemes slowed after July’s record-setting run.
The moderation reflects a pause in momentum, though investors continue to stay invested despite a weak market backdrop.
According to data from the Association of Mutual Funds in India (AMFI), equity schemes recorded net inflows of Rs 33,430 crore in August, down from Rs 42,702 crore in July, a dip of around 22 per cent.
While the decline marked a step back from the previous month’s record, it still underscored the strength of domestic participation, with August becoming the 54th consecutive month of positive equity flows.
Weaker equity market
The moderation coincided with a weak month for equities. The BSE Sensex slipped 1.69 per cent in August, while the BSE Midcap index lost 2.5 per cent and the BSE Smallcap index shed 3.7 per cent.
Within equities, flexi-cap funds were the largest contributor with Rs 7,679 crore, while mid-cap funds at Rs 5,331 crore and small-cap funds at Rs 4,993 crore continued to draw strong inflows despite elevated valuations.
Sectoral and thematic funds added another Rs 3,893 crore, largely due to two reasons: a) a sustained appetite for targeted strategies and b) launch of new funds.
Systematic investment plans (SIPs) remained steady in August, with monthly contributions at Rs 28,265 crore only a shade lower than July’s Rs 28,464 crore.
Hybrid schemes also held their ground with Rs 15,294 crore in net inflows, only slightly lower than July’s Rs 20,879 crore. Arbitrage funds led with Rs 6,667 crore, reflecting their appeal as a low-risk strategy in volatile markets, while multi-asset allocation funds brought in Rs 3,528 crore as investors sought diversification across equity, debt and commodities.
Akhil Chaturvedi, Executive Director and Chief Business Officer at Motilal Oswal Asset Management, attributed the dip in investments to fewer New Fund Offer (NFO) launches in August as compared to July. “Apart from that, the flow momentum remains steady and healthy. If you look at past trends, Indian investors continue to add equities to their portfolios despite global headwinds and FII selling, which is a very positive sign for the markets,” he said.
Also read: AMFI's new leaders chart course for mutual fund 2.0
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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