Inflows into equity mutual funds declined by 3.2% in April 2025, totaling ₹24,269.26 crore, compared to ₹25,082.01 crore in March, as per the latest data from the Association of Mutual Funds in India (AMFI). The moderation in inflows came amid rising geopolitical tensions and market uncertainty surrounding the U.S. Federal Reserve’s policy decisions. Investors adopted a more cautious approach, leading to reduced participation in select equity categories such as midcap and small cap schemes.
However, even as inflows into equity mutual funds eased, systematic investment plans (SIPs) continued to gain traction. SIP contributions touched a historic high of ₹26,631.88 crore in April. The increase in SIP investments reflects investors’ long-term commitment to wealth creation through disciplined investing.
Asset Under Management (AUM) Reaches Record High
The mutual fund industry’s net assets under management (AUM) expanded significantly during April. Total AUM climbed by 6.4% to ₹69.99 lakh crore, up from ₹65.74 lakh crore in March 2025. The growth in AUM demonstrates strong investor interest in mutual funds, particularly in the debt and hybrid fund categories.
Retail AUM, which includes equity, hybrid, and solution-oriented schemes, stood at ₹40.29 lakh crore. This figure underscores the confidence of retail investors in the mutual fund route, even amid temporary market fluctuations and global economic uncertainties.
Mixed Trends Across Equity Mutual Fund Categories
The equity mutual fund category witnessed a divergent performance in April. Inflows into midcap funds dropped by 3.63%, recording ₹3,313.98 crore, compared to ₹3,438.87 crore in the previous month. Small cap funds also faced a decline in investor interest, with net inflows falling 2.25% to ₹3,999.95 crore from ₹4,092.12 crore in March.
Market analysts attribute this shift to increasing volatility in the broader markets and concerns around valuations in the midcap and small cap space. Investors preferred to reallocate funds to relatively safer or better-performing categories.
In contrast, large cap funds received higher inflows. These funds garnered ₹2,671.46 crore in April, marking a 7.75% increase from the ₹2,479.31 crore recorded in March. The inflow surge into large caps suggests a preference for stability and quality amid an uncertain macroeconomic backdrop.
Sectoral and thematic funds attracted significant investor attention in April. These funds recorded inflows of ₹2,000.95 crore, a dramatic rise compared to the modest ₹170.09 crore in the previous month. This sharp increase indicates a rising appetite for theme-based investment strategies, especially in sectors like technology, defense, energy, and infrastructure, which gained prominence due to macroeconomic developments.
Debt Funds Witness Strong Revival
Debt mutual fund schemes posted a remarkable turnaround in April. The category saw inflows of ₹2.19 lakh crore, reversing the previous month’s outflows of ₹2.02 lakh crore. This recovery came on the back of fresh investments by institutional investors who had redeemed their holdings towards the end of the financial year.
Liquid funds emerged as the biggest beneficiaries within the debt category, attracting ₹1.18 lakh crore in inflows. Money market funds received ₹31,507.04 crore, while overnight funds recorded ₹23,899.98 crore in new investments. The significant return of capital to short-duration and highly liquid debt instruments signals renewed confidence among institutional investors, who favor these funds for managing short-term cash flows and liquidity requirements.
Manish Mehta, National Head – Sales, Marketing & Digital Business at Kotak Mahindra AMC, highlighted that institutions reinvested heavily in the fixed income category after year-end redemptions. They preferred liquid and ultra-short duration funds to park surplus capital securely.
Hybrid Funds Bounce Back Strongly
Hybrid mutual fund schemes staged a strong recovery in April. Net inflows into hybrid funds totaled ₹14,247.55 crore, marking a sharp contrast to the net outflows of ₹946.56 crore observed in March. The hybrid category, which includes balanced advantage and aggressive hybrid funds, attracted investors seeking a blend of equity and debt exposure to manage volatility while aiming for capital appreciation.
The renewed interest in hybrid funds suggests that investors recognize the benefits of diversification across asset classes. Many opted for this category as it provides a balanced approach amid market instability.
Gold ETFs Witness Marginal Outflows
In April, gold exchange traded funds (ETFs) saw marginal outflows worth ₹5.82 crore. This slight decline in gold ETF assets may indicate profit booking or a shift in investor preference toward equities and debt funds in light of improved market sentiment and return potential.
Despite global uncertainties, the marginal outflow suggests that investors remained cautiously optimistic and possibly reallocated capital to other better-performing asset classes in the short term.
SIPs Continue Robust Growth Trajectory
Systematic Investment Plans continued to exhibit robust growth in April, providing a stable foundation for the mutual fund industry. The number of new SIP registrations stood at 46.01 lakh during the month. Additionally, the number of contributing SIP accounts reached 8.38 crore, reflecting deepening retail participation in the market.
The total SIP assets under management (AUM) surged to ₹13.89 lakh crore, reinforcing the increasing reliance on SIPs as a primary investment route among Indian households. The consistency of SIP inflows offers a cushion to the equity market against short-term volatility and underscores investor discipline.
Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, noted that rising geopolitical tensions and caution ahead of the U.S. Federal Reserve’s policy decision impacted investor sentiment in April. Despite this, SIPs remained resilient, highlighting the long-term confidence investors place in mutual fund investments.
Retail Participation and Folio Growth
Retail participation in mutual funds stayed strong in April. Total mutual fund folios stood at 23.62 crore, while retail folios in equity, hybrid, and solution-oriented schemes reached 18.71 crore. The steady increase in folios shows continued interest from individual investors and growing financial awareness across different investor segments.
As investors diversify their portfolios and seek better returns compared to traditional instruments, mutual fund folio growth reflects the shift in investment behavior across the country.
Conclusion
April 2025 delivered a mixed performance for the mutual fund industry. While equity fund inflows dipped slightly, SIP contributions scaled new highs. A significant rebound in debt mutual fund flows and strong resurgence in hybrid funds highlighted changing investor preferences amid market uncertainty and global volatility.
Retail investors, particularly those using SIPs, continued to support the mutual fund ecosystem. Meanwhile, institutional investors returned to debt funds with substantial allocations. The data from April underscores a maturing investor base that now leverages a range of schemes to balance risk and optimize returns.
Going forward, market trends, policy actions by global central banks, and geopolitical developments will shape investment flows. However, the continued rise in SIPs and growing participation from retail and institutional investors alike positions the Indian mutual fund industry for sustained growth.
