The Indian mutual fund industry ended the financial years with assets of Rs 65.74 lakh crores. The Industry witnessed net outflows of Rs 1.64 lakh crores due to outflows from debt schemes to pay advance tax as well as not show investments in mutual funds at the end of the year on their balance sheets. The equity markets did well in March with the broader as well as large cap indices showing good gains. The Nifty 500 was up 7.35% and the Nifty 50 was up 6.31%. This helped the equity assets to increase to Rs 29.45 lakh crores. Other asset classes such as hybrids as well as passive funds also saw an increase in assets.
Mutual Fund Industry Overview – March 2025
🔹 Total AUM & Net Inflows:
– The mutual fund industry’s total AUM stood at ₹65.74 lakh crore, reflecting an 23.1% YoY increase.
– It was also up by 1.04% from February 2025.
– The monthly inflows were hugely negative due to debt schemes. Inflows were positive in the last two months. The net outflow in this March was almost similar to the outflows seen in March 2024.
🔹 Monthly flow and AUM trends:
Equity Mutual Funds :
– This is the fourth consecutive month that saw net inflows into equity schemes seeing a decline. Flows have fallen to Rs 25,082 crs from Rs 41,156 crs in December 2024.
– SIP flows have also fallen. They were Rs 26,459 crores in December 2024 and are now Rs 25,926 crs. This is not as big a reduction as in lumpsum flows. SIPs tend to be stickier and these numbers bear them out.
– Net flows in equity mutual funds are lower than SIP flows which show that lumpsum investments have dried up. One year returns are now in single digits and three month returns are negative. Investors should stop looking at past returns to determine the timing of their investments. This is the time when SIPs will average out the cost of units and give higher returns when markets go up in the future. Hope investors not only not stop their SIPs but also not redeem their investments and stay invested. Returns are compounded over long periods of time.
– Sectoral/Thematic Funds: ₹170 crore
– Flexi-Cap Funds: ₹5,615 crore
– Small-Cap Funds: ₹4,092 crore
– Mid-Cap Funds: ₹3,439 crore
Thematic funds have shown a big dip in flows compared to a few months ago. This may be due to a lack of NFOs in this space. The AUM of thematic funds has shown a growth of 53% over the last one year compared to the overall growth of 25% in all equity categories. The lowest growth was shown by ELSS funds. They grew by 8.6% over one year.
📌 #EquityFunds #MutualFunds #WealthCreation #LongTermInvestment #EquityMarket #ELSSschemes #Equityschemes
Debt Funds: Outflows due to the end of the financial year
The debt mutual fund segment saw large outflows due to the financial year end as well as the last advance tax instalment due in the middle of March. Outflows in this March were just a bit higher than last year but much more than that in December 2024 which was a quarter end month.
📉 Key Trends in Debt Funds:
– Total debt fund AUM was ₹15.08 lakh crore, a 11.0% dip compared to last month but up by about 20% compared to last year as well as up by 17% over three years.
– Liquid and money market funds saw the largest fall in AUM due to year end outflows. Corporate bond funds as well as short term bond funds saw an increase in AUM inspite of outflows. This may be due to reduction in interest rates leading to increase in prices of bonds.
– Liquid funds saw the largest outflow followed by overnight funds and then money market funds. This caused the AUM of liquid funds to fall below that of thematic and flexi cap funds.
– Gilt and long duration funds have shown a good growth in AUM over the last one year mainly to take advantage of an anticipated fall in interest rates. However, the assets of these schemes continue to remain quite small indicating that they are still a niche play. Money market funds have also shown a good increase of over 50% compared to last year and are now the second largest debt funds category.
#DebtFunds #InterestRates #BondMarket #FixedIncome #FinancialPlanning
Hybrid & Passive Funds: Shift towards multi asset funds
Net inflows into hybrid funds stood at –₹947 crore, led by Arbitrage funds, which saw outflows of ₹ 2,855 crore in March.
📊 Hybrid Funds Inflows Breakdown:
– Arbitrage Funds: –₹2,855 crore
– Multi-Asset Allocation Funds: ₹1,670 crore
– Dynamic Asset Allocation/Balanced Advantage Funds: ₹776 crore
📌 #HybridFunds #Diversification #RiskManagement #BalancedInvestment
🧐 Why the Shift to Multi Asset Funds?
– Multi-asset allocation funds provide diversification, making them a preferred choice in uncertain market conditions. These funds are the fastest growing category of hybrid funds providing investors with double digit returns with low volatility.
📌 #MutualFundIndia #InvestWisely #GrowYourMoney #PersonalFinance #IndiaMarkets #InvestmentGoals
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