Despite volatility, MF industry stays strong with net inflows in equity funds

Despite heightened volatility in the markets, the MF industry has witnessed net inflows in equity funds for the 48^th consecutive month.

Equity funds have recorded net inflows of Rs.28,300 crore in February.

However, the average AUM of the MF industry has declined marginally to Rs. 67.31 lakh crore compared to Rs. 67.77 lakh crore in January.

Overall, the net inflows of the industry in February has reduced to Rs. 40,077 crore as against Rs. 1.87 lakh crore in the previous month.

The Chief Executive of AMFI, Venkat N Chalasani said that the mutual fund market is subject to market risks and volatility is going to be there in the market. But the trajectory of the Indian economy is going upward and the industry stakeholders need to be patient to avail the long-term benefits of MF investments.

Here are the key trends of the MF industry February 2025:

Equity funds

●      The AUM of the equity funds stands at Rs. 28.77 lakh crore in February compared to Rs. 29.78 lakh crore in January

●      Sectoral/thematic funds, flexi cap funds and small cap funds have witnessed the highest inflows among equity funds

●      Sectoral/thematic funds witnessed net inflows of Rs. 5,712 crore while the flexi cap funds witnessed netinflows of Rs. 5,104 crore

• Small cap funds have recorded inflows of Rs. 3,722 crore

Debt funds

●      Overall, debt funds have witnessed net outflows of Rs. 6,526 crore compared to inflows of Rs. 1.29 lakh crore in the previous month

●      In February, the AUM of debt funds stands at Rs. 17.70 lakh crore as against the AUM of Rs. 17.14 lakh crore in January

●      Money market funds have witnessed outflows of Rs. 3,276 crore while the low duration funds witnessed outflows of Rs. 2,825 crore

●      On the other hand, overnight funds have witnessed outflows of Rs. 2,264 crore

• Liquid funds, corporate bond funds and short duration funds have witnessed  net inflows of Rs. 4,977 crore, Rs. 1,067 crore and Rs. 729 crore, respectively

Hybrid funds

●      Hybrid funds have witnessed inflows of Rs. 6,804 crore

●      AUM of hybrid funds stand at Rs. 9.26 lakh crore as against Rs. 9.25 lakh crore in January

●      Arbitrage funds and multi asset allocation funds have witnessed the highest inflows in this category while conservative hybrid funds have witnessed outflows in February

●      Arbitrage funds have recorded net inflows of Rs. 3,592 crore

●      Multi asset allocation funds have witnessed inflows of Rs. 2,228 crore

• On the other hand, the conservative hybrid funds have witnessed outflows of Rs. 81 crore

Passive funds

●      Passive funds have witnessed inflows for the 52^nd consecutive month

●      The total inflows in the passive funds in February stands at Rs. 10,294 crore

• The AUM under passive funds stood at Rs. 10.76 lakh crore compared to an AUM of Rs. 11.19 lakh crore in January

●      Index funds have witnessed the highest inflows of Rs. 4,177 crore

●      The other ETFs have witnessed inflows of Rs. 3,846 crore compared to the inflows of Rs. 1,172 crore in January 

• Gold ETFs have witnessed inflows of Rs. 1,978 crore 

Folio count

●      The industry has added 30.81 lakh folios in February

●      By the end of February, the total number of folios stands at 23.23 crore 

• Equity funds have added 11 lakh folios

SIPs

●      Gross inflows through SIPs have declined marginally to Rs. 25,999 crore from Rs. 26,400 crore in January

●      The total AUM under the SIPs stand at Rs. 12.20 lakh crore compared to AUM of Rs. 12.38 lakh crore

●      The share of SIP AUM in the total AUM of the MF industry has declined to 19.2% compared to a share of 19.6% in January

●      In February, the industry has added 44 lakh new SIP accounts while 55 accounts were discontinued in this month

Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC, said, “Continuous monthly market correction has led to slowdown of the sales for the first time in Feb, this could also be partially attributed to a truncated month. Allocations are being tilted towards Multi Asset Allocation, Large and Flexi categories. Investors are being cautious in allocations and may postpone or stagger in near future. Having said so, net sales of 30k cr is also pretty healthy and the broader sentiment looks optimistic from a long term wealth creation perspective.”

Juzer Gabajiwala, Director and Company Secretary, Ventura, said, "Gross collections across major categories have seen a dip in collection. In fact, debt-oriented funds had a net outflow on Feb 25. Huge drop can be seen in the short-term instruments and this looks more towards corporate redemption.”

Venkat Chalasani, Chief Executive, AMFI said, “The Indian mutual fund industry continues to demonstrate resilience, with consistent investor participation across categories. Despite market fluctuations, net inflows stood at Rs 40,063 crores, reflecting investor confidence in long-term wealth creation.”

He claimed that the decline in the overall AUM from January to February was primarily due to mark-to-market losses in equity funds. SIP contributions remained steady, highlighting the continued preference for systematic investments.

He further said that AMFI remains committed to investor education and awareness, promoting financial discipline through all market conditions.