Multi Asset Funds Continue to Attract Inflows in March 2025: Motilal Oswal AMC Study
Motilal Oswal Asset Management Company (MOAMC) latest study ‘Where the Money Flows’ observes that Multi Asset Funds continue to attract inflows in the Hybrid category, securing approximately 74% of the net inflows. Balanced Advantage and Aggressive Hybrid funds recorded healthy inflows of around Rs. 2KCr and Rs.1KCr, respectively. Conservative Hybrid was the only category with a notable net outflow of Rs.0.5KCr, implying a reduced preference for debt-heavy hybrid allocations during the quarter.
The report takes a closer look at how investors are allocating funds across different segments of the mutual fund (MF) industry for the quarter ending March 2025. The mutual fund industry recorded estimated net inflows of Rs.25,000 crore. While passive funds attracted Rs.33,000 crore in net inflows, active funds saw a net outflow of Rs.8,000 crore—largely due to redemptions in debtoriented categories rather than equity. Debt funds witnessed Rs.110,000 crore in outflows, reversing from Rs.38,000 crore of inflows in the previous quarter. This was mainly driven by advance tax payments made by corporates, which led to major redemptions from Constant Maturity Funds (Rs.103,000 crore). The industry also witnessed 73 new fund launches, gathering Rs.13,067 crore through NFOs,a meaningful portion of the net inflows during the quarter
Prateek Agrawal, MD & CEO, Motilal Oswal Asset Management Company Ltd (MOAMC) said “The mutual fund industry’s Assets Under Management (AUM) rose to Rs.65.74 lakh crore in March 2025, a robust 23.11% increase year-on-year from Rs.53.40 lakh crore in March 2024. The steady rise in Mutual Funds AUM reflects a gradual shift in household savings towards financial assets, supported by growing comfort with market-linked investments and a broader awareness of mutual fund products. Continued flows through Systematic Investment plans (SIPs) and a more accessible investment ecosystem have also contributed to the industry’s sustained growth.”
Pratik Oswal, Chief of Business Passive Funds, Motilal Oswal Asset Management Company Ltd (MOAMC) said, “In FY25, passive funds saw a 21% year-on-year increase in AUM rising 21% year-onyear to Rs.11.13 lakh crore. This growth was driven by the continued adoption of rule-based investing and the preference for low-cost structures. While equity-based passive products led the way, debt ETFs also saw modest growth with AUM at Rs.97,000 crores, indicating early signs of broader diversification within passive strategies.”
Equity funds leads the pack
During the quarter, equity funds remained the key contributor, with net inflows of Rs.117,000 crore, reflecting steady interest in long-term growth assets. Active Equity led the way with net inflows of about Rs.92KCr, followed by Rs.25KCr in Passive Equity. Passive equities now account for21.5% of total net flows within the equity category.
Investors tilted towards Broad Based funds
Overall, at 64% of market share, Broad Based funds took away the major share of equity net inflows. The net flows share of Broad-Based funds in Passive Equities increased from 66%to 84% (QoQ), while in Active Equities, it increased from 70% to 72%(QoQ). Among Active Equity, net inflows in Thematic funds continue to decline, settling at around Rs.9KCr. Within Passive Equity, Broad-Based funds saw higher inflows, with Factor funds holding a 15% share and Thematic funds at 2.7%.
Large Caps lead the Broad-Based segment
Among the Active Broad-Based segment, Flexi Cap and Small Cap funds saw net inflows of Rs.16.5kCr and Rs.12kCr respectively, followed by MidCap funds at Rs.11.7kCr. For Passives, investors continued to prefer Large Cap for their allocations with the category receiving 90% of net inflows. However, there was a marginal decline in the share of flows, with some shift towards the Mid-Cap and Small-Cap segments.
Investors preferred Infrastructure & Consumption themes in the Thematic segment
Overall, net inflows in thematic mutual funds declined from around Rs.14KCr to Rs.8.4KCr (QoQ). Consumption and Infrastructure themes together garnered inflows of around Rs.2.2KCr in the thematic space, while the Manufacturing theme experienced a marginal outflow. Defence theme saw investor interest, with net inflows of around Rs.1KCr. Passively managed Thematic funds also witnessed the emergence of new themes like Capital Markets and EV.
Significant outflows in Debt Funds driven by institutional tax related payments
Debt funds saw Rs.110k Cr in net outflows, a reversal from Rs.38kCr inflow last quarter. Constant Maturity funds dominated the outflows, making up around Rs.103kCr, overall. This was followed by categories like Floating Rate and Gilt, recording outflows of around Rs.2.6kCr and Rs.2.5kCr respectively. Target Maturity funds, on the other hand, recorded net outflows of around Rs.2.8KCr
Liquid funds were the key driver of outflows
Active Liquid funds witnessed net outflows of around Rs.52k Cr, primarily driven by corporate advance tax disbursals in March. Passive Liquid Funds inflows stood at Rs.1.4KCr, reflecting steady institutional deployment. This was followed by Overnight & Ultra Short Duration categories, recording outflows of Rs.30.8k Cr and Rs.12.4kCr respectively. Generally, investors use debt funds with maturity upto1 year to park excess cash in the short term leading to high volatility in inward & outward flows
International Funds Continue Pause
The international category experienced minimal flows across segments, largely due to restrictions on new investments in such schemes imposed by the RBI threshold. Broad-Based funds recorded marginal net inflows of Rs.0.1kCr. Passively managed thematic international Funds saw net outflows of Rs.0.8KCr.
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