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Below the Perspective on AMFI Data by Mr Vineet Jain, Senior Director, CareEdge Ratings

“The mutual fund industry closed September 2026 with assets under management (AUM) of Rs.82.6 lakh crore. This was 5.1% lower than Rs.87.1 lakh crore in August. However, AUM remained 9.3% higher than the year-ago level. The industry recorded net outflows of Rs.1.33 lakh crore in September, compared with net inflows of Rs.41,354 crore in August. Debt-oriented schemes drove most of the decline. They saw redemptions of Rs.1.83 lakh crore, mainly from liquid and money market funds. These withdrawals were in line with the treasury outflows usually seen at the end of a quarter.

Equity-oriented schemes received net inflows of Rs.38,307 crore in September. This was 30% higher than the Rs.29,329 crore recorded in August, despite softer markets. Equity AUM declined 4.3% month-on-month to Rs.37.54 lakh crore despite positive net inflow. The fall in AUM largely reflected mark-to-market losses rather than investor redemptions. Investor demand for equity funds therefore remained firm. Among equity categories, small cap funds received the highest inflows of Rs.9,039 crore. Mid cap funds followed with inflows of Rs.7,835 crore, while flexi cap funds received Rs.6,702 crore. Large cap funds returned to positive territory with inflows of Rs.860 crore after two consecutive months of outflows. ELSS was the only notable equity category to record a net outflow, at Rs.662 crore.

Debt-oriented schemes recorded net outflows of Rs.1.83 lakh crore in September, sharply higher than the marginal outflow of Rs.8,127 crore in August. Debt AUM declined 8.8% to Rs.17.64 lakh crore. Liquid funds and money market funds accounted for roughly 80% of the total outflows, with redemptions of Rs.95,743 crore and Rs.50,846 crore, respectively. Outflows were also seen in ultra short-term funds (Rs.11,729 crore), overnight funds (Rs.7,281 crore) and corporate bond funds (Rs.4,652 crore). Redemptions in longer-duration categories were comparatively limited. Long-term funds saw outflows of Rs.403 crore, while dynamic bond funds recorded outflows of Rs.619 crore. In contrast, gilt funds received modest inflows of Rs.600 crore.

The RBI’s decision to increase the minimum daily CRR maintenance requirement from 90% to 99% from 16 October could put some upward pressure on yields. The direction of government bond yields will mainly depend on inflation, rate expectations and the government’s borrowing programme. A further rise in yields could lead to mark-to-market losses for longer-duration debt funds.  Given the surplus liquidity in the system, the impact on overnight, liquid and money market funds is likely to be limited. Debt inflows may partly recover in October as quarter-end redemptions unwind.

ETF inflows rose to Rs.15,501 crore in September from Rs.10,161 crore in August. ETF AUM increased to Rs.11.50 lakh crore. Equity ETFs received inflows of Rs.9,960 crore, gold ETFs Rs.4,451 crore and silver ETFs Rs.1,974 crore. Debt ETFs, however, recorded a small outflow of Rs.884 crore.

Index funds moved in the opposite direction and recorded net outflows of Rs.3,614 crore. A withdrawal of Rs.6,258 crore from debt index funds outweighed inflows of Rs.2,649 crore into equity index funds. As a result, index fund AUM declined 7.1% to Rs.3.20 lakh crore.

NFO collections fell to Rs.2,708 crore in September from Rs.7,110 crore in August. However, the number of new fund offers increased to 28 from 26.”

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