Mutual fund AUM in Feb-25 dipped sharply to ₹64.53 Trillion

13 Mar 2025 , 11:39 AM

TEPID MARKETS TAKES ITS TOLL ON EQUITY FUND FLOWS

February 2025 saw outflows from debt funds, albeit fairly small at ₹(6,526) Crore. However, flows into active equity funds were also subdued at ₹29,303 Crore, which is the lowest flow number since April 2024. Clearly, the market uncertainty appears to have taken a heavy toll on equity fund inflows, as even the pace of NFOs and SIPs slowed in the month of February 2025. Overall inflows into mutual funds were relatively tepid at ₹40,063 Crore.

Interestingly, hybrid and passive funds saw robust flows in February 2025. Hybrid allocation funds (including solution funds) saw net inflows of ₹7,050 Crore in February 2025, although this was predominantly led by arbitrage funds and multi-asset allocation funds. The passive funds saw some interest building up in an uncertain month with inflows of ₹10,249 Crore in Feb-25. Let us take a quick look at the SIP story and the NFO story for February 2025.

SIPS AT QUARTERLY LOWS, NFOS DOWN TO A GRIND

Gross SIP inflows in February 2025 was the lowest in the last 3 months at ₹25,99 crore, although the fall has not been too sharp; compared to ₹26,400 Crore in Jan-25 and ₹26,459 Crore in Dec-24. Of  course, one can argue that the net SIP accretion has been sharply impacted by the SIP closure ratio staying above 100% for second month in a row; but that is another issue. The NFO story was subdued in February 2025 collecting just ₹4,029 Crore across 28 NFOs. Once again, it was the sectoral and thematic funds that dominated the NFO story, although the total NFOs itself was very small. Apart from thematic funds; multi-cap funds and multi-asset allocation funds also saw NFO collections in February 2025.

DOMINATING THE ₹1 TRILLION CLUB

The Trillion rupee club includes fund categories with over ₹1,00,000 Crore (or ₹1 Trillion) in AUM. Out of the 39 categories of open-ended funds, there are still 22 open ended fund categories with AUM of over ₹1 Trillion. Out of the 16 active debt schemes, 6 categories are in the Trillion rupee club. Significantly, 10 out of the 11 categories of equity funds are still in the ₹1 Trillion club, with dividend yield funds being the only exception. In the allocation category, 4 out of the 8 funds are in the ₹1 Trillion club. Overall, Index ETFs is the single largest category with AUM of ₹7.27 Trillion; followed by Liquid Funds ₹5.67 Trillion, Sectoral / Thematic funds ₹4.27 Trillion, and Flexi Cap Funds at ₹4.06 Trillion.

NET INFLOWS IN FEB-25 WERE ABOUT NON-DEBT FLOWS

Here is a quick look at monthly flows across fund categories in last 13 months.

Month	Debt Fund Flows (₹ Crore)	Equity Fund Flows (₹ Crore)	Hybrid Fund Flows (₹ Crore)	Passive Fund Flows (₹ Crore)	Total MF Flows (₹ Crore)
Feb-24	63,809	26,866	18,288	9,756	1,18,351
Mar-24	(1,98,299)	22,633	5,791	12,793	(1,59,387)
Apr-24	1,89,891	18,917	20,110	11,505	2,39,233
May-24	42,295	34,697	18,456	15,665	1,11,103
Jun-24	(1,07,358)	40,608	9,039	14,602	(43,109)
Jul-24	1,19,588	37,113	17,663	14,778	1,89,141
Aug-24	45,169	38,239	10,233	14,599	1,08,123
Sep-24	(1,13,834)	34,419	5,366	3,254	(71,114)
Oct-24	1,57,402	41,887	17,189	23,428	2,39,907
Nov-24	12,916	35,944	4,443	7,061	60,295
Dec-24	(1,27,153)	41,156	4,703	784	(80,355)
Jan-25	1,28,653	39,688	9,011	10,255	1,87,551
Feb-25	(6,526)	29,303	7,050	10,249	40,063

Data Source: AMFI (negative figures in brackets)

Active debt fund flows slipped back into the negative in February 2025 at ₹(6,526) Crore. Equity fund inflows were at a 10-month low of ₹29,303 Crore; with inflows falling below ₹30,000 Crore for the first time in 9 months. Other categories were also robust. Hybrid Funds (including solution funds) saw inflows led by arbitrage funds and multi-asset allocation funds. The passive funds saw net inflows spike to ₹10,249 Crore, led by index funds, index ETFs, and gold funds.

HOW THE ₹64.53 TRILLION NET AUM ADDED UP?

As of the close of February 2025, mutual funds reported AUM of ₹64.53 Trillion. Here is the AUM mix for the last 13 months.

Month	Debt AUM (₹ Trillion)	Equity AUM (₹ Trillion)	Alternate AUM (₹ Trillion)	Total AUM (₹ Trillion)
Feb-24	14.50	23.12	16.62	54.54
Mar-24	12.62	23.49	17.02	53.40
Apr-24	14.59	24.74	17.66	57.26
May-24	15.12	25.40	18.13	58.91
Jun-24	14.13	27.68	19.08	61.16
Jul-24	15.44	29.34	19.92	64.97
Aug-24	16.00	30.09	20.35	66.70
Sep-24	14.97	31.10	20.75	67.09
Oct-24	16.64	29.89	20.46	67.26
Nov-24	16.86	30.36	20.60	68.08
Dec-24	15.67	30.58	20.41	66.93
Jan-25	17.06	29.47	20.46	67.25
Feb-25	17.08	27.40	19.79	64.53

Data Source AMFI

For February 2025, active debt fund AUM was marginally up at ₹17.08 Trillion; despite negative flows as falling rates boosted AUM value. Debt fund AUM is up 17.8% on yoy basis. The AUM of equity funds fell sharply to ₹27.40 Trillion in February 2025 from ₹29.47 Trillion last month. It is still way below its September 2024 peak. Equity fund AUM higher 18.5% yoy. Alternate AUM is lower MOM but 19.1% higher yoy. Here is a look at the AUM shares of various categories of funds as of February 2025.

Month	Active Debt Funds	Active Equity Funds	Hybrid Funds	Passive Funds	Solution Funds	Close-ended Funds
Sep-24	22.32%	46.36%	13.04%	17.08%	0.80%	0.40%
Oct-24	24.74%	44.45%	12.98%	16.67%	0.78%	0.40%
Nov-24	24.76%	44.59%	12.88%	16.60%	0.77%	0.39%
Dec-24	23.42%	45.68%	13.10%	16.61%	0.79%	0.40%
Jan-25	25.37%	43.82%	13.02%	16.64%	0.76%	0.40%
Feb-25	26.47%	42.45%	13.20%	16.71%	0.75%	0.41%

If you take a 5-month perspective (February 2025 over September 2024), active equity funds, passive funds and solution funds have lost AUM share, while debt funds and hybrid funds have gained AUM share. In fact, since the peak of September 2024, the AUM share of active equity funds is down by 391 basis points at 42.45%.

ACTIVE DEBT FUNDS: AUM GAINS FROM FALLING BOND YIELDS

Debt funds saw net outflows of ₹(6,526) Crore in February 2025. Big drivers of positive inflows were Liquid Funds ₹4,977 Crore and Corporate Bond Funds ₹1,065 Crore. Outflows were seen in February 2025 in Ultra Short Duration Funds ₹(4,281) Crore, Money Market Funds ₹(3,276) Crore, Low Duration Funds ₹(2,825) Crore, and Overnight Funds ₹(2,264) Crore. The debt fund flows continue to be concentrated at the short end of yield curve.

ACTIVE EQUITY FUNDS: DEMAND FOR RISK IS STILL THERE

In February 2025, equity funds saw subdued net inflows of ₹29,303 Crore. Big drivers of inflows into equity funds were Multi-Cap / Flexi-Cap Funds ₹7,622 Crore, Sectoral / Thematic Funds ₹5,712 Crore, Small Cap Funds ₹3,722 Crore, Mid-Cap funds ₹3,407 Crore, Large Cap Funds ₹2,866 Crore, and large & mid-cap funds ₹2,656 Crore. None of the equity fund categories saw negative flows in February 2025.

HYBRID AND PASSIVE FLOWS ROBUST IN FEBRUARY 2025

The inflows into hybrid funds and solution funds remained robust at ₹7,050 Crore in February 2025. In the hybrid category, net inflows were dominated by Arbitrage Funds at ₹3,592 Crore and Multi-Asset Allocation Funds at ₹2,228 Crore. Only conservative hybrid funds showed marginal outflows.

In the passive category; inflows were dominated by index Funds ₹4,177 Crore followed by Index ETFs at ₹3,846 Crore and Gold Funds at ₹1,980 Crore. The passive category flows in February 2025 were almost at par with January 2025.

Despite the uncertainty in the markets and the persistent sell-off by FPIs, the good news is that the long term mutual fund investor is not overtly perturbed. Whether that works in their favour or against them, is something only time will tell!