Perspective on Monthly Mutual Fund by Sanjay Agarwal, Senior Director, CareEdge Ratings
Below the Perspective on Monthly Mutual Fund by Sanjay Agarwal, Senior Director, CareEdge Ratings
The mutual fund industry’s assets under management (AUM) rose by 1.3% month-on-month to Rs.75.36 lakh crore, reflecting sustained investor confidence despite global trade tensions and macroeconomic uncertainties. This growth was driven by continued inflows into both debt and equity mutual funds, supported by consistent contributions through Systematic Investment Plans (SIPs) and rising financial awareness among investors. Overall inflows stood at Rs.1.50 lakh crore however AUM growth was lower on account of MTM losses.
The debt mutual fund category saw notable inflows, primarily driven by money market and liquid funds, which together accounted for 79% of the total inflows in this segment. This trend underlines investors’ preference for short-duration instruments amid prevailing market volatility and interest rate uncertainties, as they seek safer avenues for parking surplus funds with relatively stable returns. Credit Risk Fund category has continued to witness outflows at a steady pace.
Open-ended equity mutual funds witnessed a 53-month highest monthly inflow of Rs.42,702 crore, registering a robust 81% month-on-month growth and remained positive for last 53 months, underscoring sustained investor confidence and consistent inflows through SIPs despite prevailing market volatility. However, ELSS funds which recorded outflows for the third straight month, signalling diminishing investor interest in the new tax environment.
Additionally, during July 2025, 30 open-ended NFOs were floated which collectively mobilised Rs.0.30 lakh crore with liquid fund and sectoral/thematic funds accounting for 29% and 24% share.
Strong SIP inflows are likely to continue into equity space, supported by sustained retail interest in long-term equity investments. However, ongoing trade tariff negotiations and global growth concerns may influence investor sentiment in the next three to four months.
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