The Net equity flows into Indian mutual funds moderated in September, according to AMFI data. Net equity inflows stood at Rs 30,405 crore in September, down from Rs 33,417 crore in August on a month-on-month basis.
Despite the slowdown in fresh equity money, the industry’s total assets under management (AUM) ticked up slightly, rising to Rs 75.61 lakh crore in September from Rs 75.18 lakh crore a month earlier.
Across equity categories, inflows softened. Large-cap funds attracted net inflows of Rs 2,319 crore in September, down from Rs 2,835 crore in August. Small-cap schemes drew Rs 4,363 crore, compared with Rs 4,993 crore in the preceding month, while mid-cap funds saw Rs 5,085 crore of net purchases versus Rs 5,331 crore in August.
While equity net flows cooled, the AMFI monthly report showed mixed activity across the wider mutual fund complex. Open-ended equity-oriented schemes together logged a net inflow of about Rs 30,422 crore in September the primary driver of the headline equity number while the overall mutual fund industry recorded modest net outflows when debt and other categories are included.
Liquid and short-term debt segments experienced large movement in September. Liquid funds saw substantial redemptions, with repurchases exceeding subscriptions by roughly Rs 66,000 crore for the month, reflecting investor preference for liquidity amid shifting market conditions. Money-market and ultra-short funds also recorded net outflows, contributing to a combined pullback in short-duration debt vehicles.
Not all pockets saw softening
Gold ETFs posted a strong month with net inflows of about Rs 8,363 crore, indicating continued investor interest in bullion as a portfolio hedge. Other passive and ETF categories also attracted money index funds recorded net inflows of approximately Rs 1,581 crore, while other ETFs added roughly Rs 8,151 crore.
Hybrid and solution-oriented funds remained steady. Hybrid schemes collectively pulled in over Rs 9,397 crore, with multi-asset and dynamic allocation products among the more active categories. Solution-oriented schemes, including retirement and children’s funds, together recorded net inflows of about Rs 286 crore.
On the supply side, asset managers launched several new schemes in September and raised nearly Rs 1,959 crore through NFOs across categories including sectoral/thematic funds, multi-asset allocation products and ETFs. The launches point to continued product innovation and distributor appetite for newer index and thematic offerings.
Scale of the industry
AMFI’s table shows total assets under management across all schemes at roughly Rs 75.61 lakh crore at month-end, with open-ended schemes accounting for Rs 75.36 lakh crore of that total. The grand total AUM figure confirms the incremental rise despite mixed flows within segments.
“Equity numbers continue to remain fairly strong despite the Nifty being flat over the past year. It is heartening to note that primary market activity was robust in September with several IPOs, while equity flows also remained strong in the secondary markets,” said Anand Vardarajan, Chief Business Officer, Tata Asset Management.
He added, “Flexicap funds continued to witness strong inflows, followed by mid- and small-cap funds. Notably, sectoral and thematic funds have been losing steam lately.
Precious metals, particularly gold and silver, have performed very well in the last couple of months. Flows into gold nearly quadrupled in September, rising from about Rs 2,000 crore in August to around Rs 8,300 crore. This surge was largely driven by strong performance as well as investors seeking safety and diversification. In the same vein, multi-asset funds saw strong flows within the hybrid category, as per Vardarajan.
Debt flows, however, turned negative, primarily due to quarter-end liquidity requirements. Festive season spending may also have contributed to the weak/negative flows in this segment, Vardarajan explained.