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Below the Comment on AMFI by Ajay Garg, CEO, SMC Global Securities 

The mutual fund industry continued to show resilience in March 2025, even as short-term market volatility and global trade concerns have impacted investor sentiment. The Average Net Assets Under Management (AAUM) stood at ?66.70 lakh crores, showing a slight dip of 1.30% from the previous month. However, the net AUM reached ?65.74 lakh crores (as on March 2025) with a whopping 23.11% rise on a year-on-year basis. This reflects the long-term growth in mutual funds despite temporary market fluctuations.

Equity-oriented mutual funds recorded net inflows of ?25,082.01 crores in March with a 14.41% drop from February. It shows that investors are being cautious amid global trade tensions and broader market uncertainty. In contrast to February, when only focused funds inflows gained momentum, March saw a broad-based rise in net inflows in equity funds. Except for large-cap and sectoral funds, all equity funds categories saw higher net inflows. This suggests that recent market corrections have encouraged investors to take advantage of lower valuations and re-enter the market for bargain buying.

Dividend yield funds saw a notable jump in net inflows, rising 104.68% month-on-month. This reflects investors’ growing interest in steady-income opportunities during uncertain times. Multi-cap and flexi-cap funds also saw healthy inflow growth of around 10%, showing that investors are looking to diversify their portfolios. Small-cap funds reported a 9.93% increase in inflows, likely driven by bargain buying after a sharp correction in this segment. On the other hand, large-cap funds’ net inflows fell by 13.49% with concerns over valuations and expected tariff impact on companies' export earnings.

Gold ETFs saw a reversal in March, with net outflows of ?77.21 crores, compared to net inflows of ?1,979.84 crores in February. This shift was driven by profit-booking following a sharp rise in gold prices. However, the AAUM for Gold ETFs grew by 3.82% to ?57,101.29 crores due to the rise in gold prices, which can further fuel the investor interest in this space.

Systematic Investment Plans (SIPs) continued to attract strong interest, with inflows standing strong at ?25,926 crores in March 2025. This highlights that the investors are trying to benefit from rupee cost averaging due to the correction in share prices.

Debt-oriented mutual funds saw net outflows of ?2.03 lakh crores in March against net outflows of ?6,525.56 crores in February, amidst a fall in bond yield. In March 2025, the total number of new schemes launched rose to 30 from 28 in February, signaling sustained trust in the market by the mutual fund houses and efforts to offer more investment opportunities.

The mutual fund industry has shown consistent performance despite the broader market volatility and global trade wars due to the threat of reciprocal tariffs. The consistent SIP inflows and surge in net inflows in almost all equity-oriented funds highlight that investors are avoiding the short-term noise and focusing on long-term growth potential.

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