Active Equity and Passive Funds drive MF inflows in Q4FY25

16 Apr 2025 , 10:30 AM

MUTUAL FUND FLOWS IN MARCH 2025 QUARTER – MACRO VIEW

Let us begin with the macro picture of quarterly flows for March 2025. The gross flows into open ended funds in March 2024 quarter stood at ₹35.66 Trillion while the redemptions of open ended funds in the quarter stood at ₹35.03 Trillion, resulting in net inflows into open ended funds to the tune of ₹0.63 Trillion. Close-ended funds saw negative flows in the quarter, due to selective redemption pressures. After 3 quarters of positive flows, debt funds saw net outflows in Q4FY25. To an extent, demand for longer duration funds have made up for the heavy selling in treasury-driven short term funds.

Macro picture of mutual fund flows in March 2025 quarter
Fund Category	Funds Mobilized	Redemptions	Net Flows	Net AUM (Mar-25)
Open Ended Funds	₹35,65,724 Crore	₹35,02,179 Crore	₹63,545 Crore	₹65,47,583 Crore
Close Ended Funds	₹24 Crore	₹321 Crore	₹(297) Crore	₹26,704 Crore
Mutual Funds Overall	₹35,65,748 Crore	₹35,02,500 Crore	₹63,248 Crore	₹65,74,287 Crore

Data Source: AMFI

As of the close of the March 2025 quarter, net AUM of Indian mutual funds stood at ₹65.74 Crore; compared to ₹66.93 Trillion in Dec-24 end, and ₹67.09 Trillion in Sep-24 end. That is a clear tapering of AUM in the last 2 quarters, largely led by fall in Nifty and Sensex from peak levels. This is despite the monthly recovery in net AUM in the March 2025 quarter.

DEBT FUND FLOWS IN MARCH 2025 QUARTER

Flows into Debt Funds in the Mar-25 quarter (AMFI)
Funds Mobilized	Redemptions	Net Flow	Net AUM (Mar-25)
₹31.83 Trillion	₹32.63 Trillion	₹(0.80) Trillion	₹15.21 Trillion

Data Source: AMFI

After 3 consecutive quarters of positive debt fund flows, the March 2025 quarter saw net outflows from debt funds to the tune of ₹0.80 Trillion. In the last 3 quarters; there has been a visible trend wherein debt fund investors are willing to lock themselves into long-dated instruments rather than just churning. However, treasury pressure dominated in March.

What were the positive and negative drivers of flows in the March 2025 quarter? Let us look at major inflows. Ironically, the only category of funds to see net inflows in the quarter was Corporate Bond funds at ₹434 Crore. What about the outflows? Liquid Funds saw net outflows of ₹(36,464) Crore, Overnight Funds ₹(13,343) Crore, Ultra Short Duration Funds ₹(12,880) Crore, Low Duration Funds ₹(3,543) Crore, Money Market Funds ₹(2,662) Crore, and Floater Funds ₹(2,652) Crore. Other categories of debt funds like short duration funds, gilt funds, and banking & PSU funds also saw outflows in the quarter.

How does the AUM of debt funds compare? Total AUM of active debt funds at the close of March 2025 stood at ₹ 15.21 Crore; compared to ₹15.67 Trillion, ₹14.97 Trillion, and ₹14.13 Trillion in the previous 3 sequential quarters. What about share of debt fund net AUM in overall AUM. As of Mar-25 end, the share of debt fund AUM stood at 23.13%; compared  to 23.42%, 22.32%, and 23.11% in the previous 3 sequential quarters.

COLOUR OF EQUITY FUND FLOWS IN MARCH 2025 QUARTER

Flows into Equity Funds in the Mar-25 quarter (AMFI)
Funds Mobilized	Redemptions	Net Flow	Net AUM (Mar-25)
₹1,77,585 Crore	₹83,512 Crore	₹94,073 Crore	₹29.45 Trillion

Data Source: AMFI

Net flows into equity funds in the March 2025 quarter stood at ₹94,073 Crore; compared to ₹1,18,986 Crore, ₹1,09,772 Crore, and ₹94,222 Crore in the previous 3 sequential quarters. Needless to say, the biggest thrust to the AUM accretion for equity funds came from a combination of alpha hunting and the need for diversification.

Let us first look at the positive inflows in the Mar-25 quarter. The flow story in the quarter was led by Multi-Cap / Flexi-Cap Funds at ₹25,255 Crore. This was followed by Sectoral / Thematic funds at ₹14,898 Crore, Small Cap funds ₹13,535 Crore, Mid cap funds ₹11,994 Crore, Large & Mid-Cap Funds ₹9,497 Crore, Large Cap funds at ₹8,405 Crore, and Value/Contra funds at ₹4,457 Crore. No equity category saw net outflows in Mar-25 quarter.

The total AUM of equity funds as of March 2025 stood at ₹29.45 Crore; compared to ₹30.58 Trillion; ₹31.11 Trillion, and ₹27.68 Trillion in the previous 3 sequential quarters. That is clear tapering from the highs of September 2024 amidst market correction and FPI selling. As of March 2025, the AUM share of equity funds stood 44.8%; compared to 45.7%, 46.4%, and 45.3% in the previous 3 sequential quarters.

HYBRID FUND FLOWS IN MARCH 2025 QUARTER

Flows into Hybrid Funds in the Mar-25 quarter (AMFI)
Funds Mobilized	Redemptions	Net Flow	Net AUM (Mar-25)
₹97,266 Crore	₹81,910 Crore	₹15,356 Crore	₹9.35 Trillion

Data Source: AMFI

In Mar-25 quarter, hybrid fund (including solution funds) saw relatively subdued net inflows of ₹15,356 Crore; the lowest net inflow in the last 5 quarters, with March seeing net outflows. Which category of funds dominated the net inflows into hybrid funds in the March 2025 quarter. Once again, Multi-asset allocation funds (MAAF) dominated the quarterly hybrid flows at ₹6,022 Crore; followed by Arbitrage Funds at ₹5,030 Crore, Balanced Advantage Funds (BAF) ₹2,953 Crore, and Balanced Hybrid Funds ₹1,237 Crore. In the March 2025 quarter, conservative hybrid funds and equity savings funds saw net outflows.

Total AUM of hybrid funds (including solution funds) in March 2025 quarter stood at ₹9.35 Trillion; compared to ₹9.29 Trillion, ₹9.29 Trillion, and ₹8.60 Trillion in the previous 3 sequential quarters. AUM share of hybrid funds in overall AUM in March 2025 stood at 14.22%; compared to 13.89%, 13.84%, and 14.06% in the previous 3 sequential quarters.

PASSIVE FUND FLOWS IN MARCH 2025 QUARTER

Flows into Passive Funds in the Mar-25 quarter (AMFI)
Funds Mobilized	Redemptions	Net Flow	Net AUM as of Mar-25
₹1,08,289 Crore	₹73,637 Crore	₹34,652 Crore	₹11.47 Trillion

Data Source: AMFI

Passive funds saw the intensity of flows picking up in March 2025. Net inflows into passive funds in Mar-25 quarter stood at ₹34,653 Crore; compared to ₹31,274 Crore, ₹32,631 Crore, and ₹41,762 Crore in the previous 3 sequential quarters. Let us now turn to how the various categories of passive funds saw flow traction in March 2025 quarter.

There was strong positive traction in index ETFs which saw net inflows of ₹15,980 Crore followed by index Funds at ₹12,932 Crore while gold ETFs saw net inflows of ₹5,654 Crore in the March 2025 quarter. In terms of AUM share, the passive funds had an AUM share of 17.45% in March 2025 quarter; compared to 16.61%, 17.08%, and 17.14% in the last 3 sequential quarters. The share of passive funds improved in the latest quarter.

WHAT WE READ FROM THE MARCH 2025 AMFI QUARTERLY REPORT?

The March 2025 quarter had some interesting takeaways for investors.

• Debt funds saw negative quarterly flows after a gap of almost 2 quarters; indicating pressure on long duration debt and also in treasury investments.
• Alpha hunting and diversification was the big story about equity funds. However, March saw a distinct shift back to passive funds, in the midst of rising market uncertainty.
• NFOs and SIPs are making a difference. However, the SIP Stoppage ratio has now been above 100% for 3 months in a row.

Mutual fund flows have held out in the March quarter, despite the uncertainties of reciprocal tariffs and volatile market conditions.