MF inflows ride SIP wave amid market volatility, push AUM up by 23%

Active equity mutual fund (MF) schemes ended 2024-25 (FY25) with record inflows — more than double of last year — as fund houses made hay while the sun shined in the first half of the year.

 

Even as the existing schemes attracted strong inflows amid the equity market rally, a slew of new offerings added another ₹85,000 crore to the equity MF FY25 kitty.

 

Seventy active equity schemes were launched last year with the bulk of the action happening in the sectoral and thematic spaces. Fund houses also took the passive route to add to the thematic fund mix. The industry added 145 new schemes on the passive side in FY25, taking the total fund count to 614.

 

As the market dynamic changed around October, the flow of one-time investments took a hit as new fund offerings (NFOs) declined.

 

However, the investments through systematic investment plans (SIPs) continued to flow unaffected. 

 

Monthly SIP inflows, which rose steadily from around ₹20,000 crore at the start of the year to ₹26,460 crore in December 2024, have remained around ₹26,000 crore in the past few months, even as the market correction wiped out the near-term SIP returns of most equity schemes.

 

“Domestic investors are channelling record SIP flows into MFs, marking a decisive shift towards disciplined, long-term market participation. This surge reflects rising financial literacy and steadfast confidence in India’s growth story,” said Dhirendra Kumar, chief executive officer (CEO), Value Research.

 

“Even market volatility hasn’t rattled the vast base of SIP investors, underscoring their resilience and commitment,” Kumar added.

 

The assets under management (AUM) of MFs rose 23 per cent in FY25 to ₹65.7 trillion. The gains came from across equity, debt, hybrid, and commodity segments. Net passive fund inflows, including debt, gold, and silver funds, were ₹1.4 trillion.

 

Debt funds also added a net ₹1.4 trillion. Hybrid funds, led by multi-asset funds, collected ₹1.2 trillion.

 

“The industry has demonstrated resilience and growth despite market volatility and global policy uncertainties driven by frequent US tariff changes. As of March, we have seen a 31.85 per cent year-on-year increase in folio count and 23 per cent rise in AUM,” said Venkat Chalasani, chief executive, Association of Mutual Funds in India.

 

“The average monthly SIP contribution reached a notable ₹24,113 crore, marking a significant increase from ₹16,602 crore observed in the preceding financial year,” Chalasani added.