India’s Mutual Fund Flows – June 2025: Total assets cross Rs 74 lakh crores based on equity market gains

The Indian mutual fund industry ended June 2025 with assets of Rs 74 lakh crores.  The Industry witnessed net inflows of Rs 0.49 lakh crores, with equity and hybrid schemes showing net positive inflows while debt schemes saw outflows.  Equity schemes saw an increase in assets to Rs 33.47 lakh crores.  Of this total increase in assets, the schemes saw a net inflow of Rs 23,587 crs and the rest was contributed by the rise in equity markets.  Nifty 500 rose by 3.77% and Nifty 50 rose by 3.37% with mid and small caps turning in good performances.  FII and DIIs invested consistently compared to the last month probably leading to the better returns.  

As we write this, tariff issues have again come to the forefront while the Israel-Iran confrontation has come to a halt.  Accordingly, markets may be driven by Q1 FY 26 results as well as other macro factors.

– The mutual fund industry’s total AUM stood at ₹74 lakh crore, reflecting an 21.7% YoY increase and a 3.1% increase over May 2025.  

– The monthly inflows were muted across all categories of schemes.  Inflows in debt schemes were negative and those in equity schemes were Rs 23,587 crores led by a reduction in redemptions.  This led to an increase in net flows in the month but the Flows were 40,000 crs in December 2024.

– Net flows saw an uptick in June mainly driven by lower redemptions.  Gross inflows were the same as last month.  SIPs have been increasing hence lumps investments may have slowed down.  Flows have fallen to Rs 23,587 crs from Rs 41,156 crs in December 2024.  The industry saw high inflows in the months of May 2024 to January 2025.  This is when the markets were showing good returns.  Now one year returns have come down to single digits and inflows have come down to half of what they were in that period.  

– SIP accounts increased in June to 8.64 crs from 8.56 crs.  SIP flows rose in June 2025 to 27,269 crs.  This is a good sign.  SIP account have increased over the last three months after falling in February and March.  Gross inflows in equity funds was Rs 56,944 crs and redemptions were Rs 36,357 crs.  The Gross inflows have fallen from 71,000 crs in May 2025.  So the industry is seeing a drop in inflows along with an increase in outflows leading to reduction in net inflows.  Investors should continue investing in markets through SIPs.  If they have lumpsum amounts to invest, they can park the same in debt or arbitrage funds and do an STP into equity funds to lower their average cost of purchase.  Since interest rates are now lower compared to a year ago, equity remains the best bet to earn higher returns over the next 3-5 years.  Investors should not expect positive double digit returns in every year.  The best times to invest are the periods where the returns in the past are low.    

– Sectoral funds saw the maximum inflows and outflows amongst equity schemes.  The next highest inflows were in flexi cap funds followed by mid cap and small cap funds.  Net inflows in various categories were as under and have declined compared to last month:  

– Sectoral/Thematic Funds: ₹475.61 (2,052) crores

– Flexi-Cap Funds: ₹5,733 (3,841) crores  

– Small-Cap Funds: ₹4,024 (3,214) crore  

– Mid-Cap Funds: ₹ 3,754 (2,808) crore  

There was two thematic fund NFOs in June which collected Rs 667 crs.   Flexi cap funds showed the highest net inflows in June followed by small and mid cap funds.  Investors should ensure that their exposure to mid and small caps are in accordance with their risk profiles.  Total exposure to these schemes should range from 25-50% of the total investment in equities.  Exposure to thematic funds should not be more than 15% of their total equity portfolio.  

 📌 #EquityFunds #MutualFunds #WealthCreation #LongTermInvestment #EquityMarket #ELSSschemes #Equityschemes

– Total debt fund AUM was ₹17.58 (17.54) lakh crore, a 0.2% increase compared to last month  but up by about 21% compared to last year.  

The Industry saw outflows from liquid and overnight funds which were compensated by inflows in money market, short duration and corporate bond funds.  One can see the trend of money into higher yield category funds due to a decrease in interest rates.  

#DebtFunds #InterestRates #BondMarket #FixedIncome #FinancialPlanning

– Hybrid funds’ assets increased to Rs 9.92 (9.55) lakh crs.  A 22% increase over the last 12 months.  Net inflows into hybrid funds stood at Rs 23,223 (20,765) crores, led by Arbitrage funds, which saw inflows of  ₹ 15,585 (15,702) crores in May.  These again shows profit booking in equity schemes or parking of funds waiting for a dip in markets to enter again.

– Multi-Asset Allocation Funds: ₹ 3,210 (2,927) crore  

– Dynamic Asset Allocation/Balanced Advantage Funds: ₹ 1,886 (1,136) crore  

📌 #HybridFunds #Diversification #RiskManagement #BalancedInvestment

– Multi-asset allocation funds and balanced advantage funds are seeing increasing inflows.  This is a good sign and these funds are inherently diversified.  Multi asset funds have exposure to three asset classes whereas balanced advantage funds invest in equity and debt on a dynamic basis.     

📌 #MutualFundIndia #InvestWisely #GrowYourMoney #PersonalFinance #IndiaMarkets #InvestmentGoals

Way forward 

Markets are expected to be volatile given the increase in geo-political issues in the middle east as well as tariffs on trade.  Investors with a long term horizon can take exposure to equities via SIPs or STPs.  Those looking at fixed income should consider corporate bond funds.

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