Steep net outflows notwithstanding, AUM of Indian mutual fund industry records marginal growth in September: ICRA Analytics

Mumbai, 30th October, 2025: The Indian mutual fund industry recorded a mixed performance in September 2025, showcasing both investor optimism and caution across asset classes. Despite steep net outflows—the sharpest seen so far this fiscal year—Assets Under Management (AUM) witnessed marginal growth, reflecting the sector’s resilience and investor confidence.

Total AUM rose to INR 75.61 lakh crore in September from INR 75.18 lakh crore in August, marking a 0.57% month-on-month increase. The growth was primarily driven by exceptional inflows into Gold ETFs and sustained investments in equity mutual funds. Equity funds added INR 30,422 crore during the month, supported by strong SIP contributions that reached a record INR 29,361 crore.

Equity AUM grew 1.8% to INR 33.7 lakh crore, with categories such as flexi-cap, mid-cap, and small-cap funds continuing to attract steady retail interest. The rising SIP inflows underscore growing investor discipline and long-term commitment to wealth creation through mutual funds.

However, overall flows turned negative due to heavy redemptions in debt funds, which saw outflows of ₹1.02 lakh crore. Liquid funds accounted for a significant portion of withdrawals, largely due to quarter-end liquidity needs and festive season spending.

Gold ETFs emerged as a standout performer, witnessing record inflows of INR 8,363 crore in September a 578% year-on-year increase. The total AUM of Gold ETFs rose by 24.33% month-on-month to INR 90,136 crore, more than doubling over the past year. This surge highlights a growing investor preference for safe-haven assets amid global economic uncertainty, a weakening rupee, and expectations of rate cuts by the U.S. Federal Reserve.

Hybrid funds registered moderate inflows of ₹9,397 crore, down 39% from August. Multi-asset allocation and aggressive hybrid funds remained popular, although the overall sentiment in the segment was subdued. Passive funds, particularly ETFs, continued to gain traction with net inflows of ₹19,057 crore.

The steady rise in SIP contributions reflects enhanced retail participation and financial awareness. Factors contributing to this trend include:

• Growing Investor Confidence: Retail investors continue SIP investments despite market volatility, reflecting a shift toward long-term investing.
• Digital Adoption: Online platforms and apps have made SIP registration and tracking more accessible.
• Financial Literacy Efforts: Awareness campaigns by AMCs and influencers have helped popularize systematic investing.
• Market Performance: Consistent returns from equity funds have encouraged sustained participation.

Overall, the mutual fund industry’s performance in September demonstrates its structural strength and adaptability. Even with temporary debt fund outflows, robust inflows into equities, Gold ETFs, and SIPs underscore the industry’s long-term growth trajectory and investor trust.

All information in this document has been sourced from ICRA Analytics Limited, which deems the data accurate and reliable. The content reflects opinions and should not be construed as investment advice or credit ratings.