April 2025 witnessed moderated investor activity in equity mutual funds, with net inflows easing on a month-over-month basis. Despite this, the equity-oriented mutual fund segment continued to attract notable investor interest, particularly in exchange-traded funds (ETFs), flexi-cap funds, and small-cap funds. As per the data available until 30th April 2025, India’s mutual fund industry recorded a total asset under management (AUM) of approximately ₹70 lakh crore, reaffirming the growing trust in mutual fund investments for long-term wealth creation.
Let us explore the top five equity mutual fund categories that garnered the highest net inflows in April 2025, signaling the evolving preferences of Indian investors.
1. Other Equity ETFs – ₹9,311 Crore Net Inflows
Overview
Equity Exchange-Traded Funds (ETFs), particularly those falling outside the standard categories, led the charts with net inflows of ₹9,311 crore in April. These funds allow investors to gain market exposure with high liquidity and lower cost.
Key Stats
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No. of Folios: Data unavailable
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Closing AUM: ₹6,99,879 crore
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Net Inflows: ₹9,311 crore
Why the Surge?
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Growing demand for passive investing with lower expense ratios
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Institutional investors, including EPFO and insurance firms, prefer ETFs for strategic allocation
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Investors increasingly seek index-tracking investments for diversification and market stability
Investor Takeaway
With continued emphasis on market-linked instruments and tax-efficient exposure, equity ETFs are becoming the core holding in many portfolios.
2. Flexi Cap Funds – ₹5,542 Crore Net Inflows
Overview
Flexi cap funds, which have the liberty to invest across market capitalizations, recorded the second-highest inflows at ₹5,542 crore. These funds provide fund managers the flexibility to shift exposure between large, mid, and small-cap stocks based on prevailing market conditions.
Key Stats
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No. of Folios: 182.1 lakh
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Closing AUM: ₹4,54,668 crore
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Net Inflows: ₹5,542 crore
Why the Surge?
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Investors value dynamic allocation strategies to mitigate volatility
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Suitable for long-term investors with moderate risk appetite
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Well-suited for market uncertainties, offering capital protection and growth
Investor Takeaway
Flexi cap funds are ideal for investors looking for professionally managed funds that adapt to market cycles without needing to rebalance manually.
3. Small Cap Funds – ₹4,000 Crore Net Inflows
Overview
Despite their inherent volatility, small cap funds continued to attract strong retail investor interest, posting ₹4,000 crore in net inflows. These funds focus on companies with relatively smaller market capitalization but higher growth potential.
Key Stats
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No. of Folios: 251.4 lakh
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Closing AUM: ₹3,07,168 crore
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Net Inflows: ₹4,000 crore
Why the Surge?
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Retail investors are chasing higher returns as small-cap stocks outperform large caps in bullish phases
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Long-term potential for wealth creation through market discovery
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Favorable earnings growth outlook in the broader economy
Investor Takeaway
Ideal for aggressive investors with a long-term horizon (5–7+ years) who can withstand short-term volatility in pursuit of superior returns.
4. Mid Cap Funds – ₹3,314 Crore Net Inflows
Overview
Mid cap mutual funds, investing in mid-sized companies poised for expansion, garnered net inflows of ₹3,314 crore in April. These companies offer a balance between the growth potential of small caps and the stability of large caps.
Key Stats
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No. of Folios: 213.1 lakh
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Closing AUM: ₹3,83,084 crore
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Net Inflows: ₹3,314 crore
Why the Surge?
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Investors increasingly view mid caps as multi-bagger opportunities in India’s growth story
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Institutional participation supports growth sentiment
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Market optimism amid stable macroeconomic indicators
Investor Takeaway
Mid cap funds offer a compelling mix of risk and return and suit investors with moderate to high-risk tolerance and a medium to long investment horizon.
5. Equity Index Funds – ₹3,051 Crore Net Inflows
Overview
Equity index funds, which passively replicate benchmark indices like Nifty 50 and Sensex, received net inflows of ₹3,051 crore. These funds have grown in popularity as investors seek low-cost alternatives with predictable returns.
Key Stats
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No. of Folios: 128.5 lakh
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Closing AUM: ₹1,77,960 crore
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Net Inflows: ₹3,051 crore
Why the Surge?
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Low expense ratios and simplicity attract first-time and seasoned investors
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Increased awareness around market efficiency and diversification
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Long-term outperformance of benchmarks over many active fund managers
Investor Takeaway
Index funds are perfect for passive investors who want to mirror market performance without the risk of underperformance from fund manager decisions.
Total Equity AUM Snapshot – April 2025
As of 30th April 2025, the total Assets Under Management (AUM) for equity mutual funds stood at an impressive ₹70 lakh crore, cementing mutual funds as a preferred investment vehicle for Indian investors. While net inflows into equities saw some deceleration compared to March, investor confidence in long-term equity investing remained firm.
Equity Fund Inflows Summary Table
| Fund Category | No. of Folios (Lakh) | Closing AUM (₹ Cr.) | Net Inflows (₹ Cr.) |
|---|---|---|---|
| Other Equity ETFs | — | 6,99,879 | 9,311 |
| Flexi Cap Funds | 182.1 | 4,54,668 | 5,542 |
| Small Cap Funds | 251.4 | 3,07,168 | 4,000 |
| Mid Cap Funds | 213.1 | 3,83,084 | 3,314 |
| Equity Index Funds | 128.5 | 1,77,960 | 3,051 |
Why Are Investors Choosing Equity Funds?
1. SIP-Driven Participation
Systematic Investment Plans (SIPs) continue to drive inflows into equity mutual funds, offering a disciplined and rupee-cost averaging approach.
2. Favorable Market Outlook
Positive GDP growth projections, stable inflation, and policy reforms enhance investor confidence in equities.
3. Rising Financial Awareness
Greater financial literacy and AMFI-led campaigns have made mutual funds more accessible, especially in Tier II and Tier III cities.
4. Long-Term Wealth Creation
Equity funds remain one of the most effective tools for beating inflation and building long-term capital appreciation.
Final Thoughts
Despite a slowdown in net inflows in April 2025, equity mutual funds remain a critical component of investor portfolios. The continued interest in ETFs and index funds reflects a growing preference for passive, low-cost strategies. At the same time, active categories like flexi-cap, small-cap, and mid-cap funds continue to attract inflows due to India’s promising economic prospects.
Investors are advised to align their fund selection with their risk tolerance, financial goals, and investment horizon. Consulting a certified financial advisor can help in crafting a balanced mutual fund portfolio suited to individual needs.
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