Despite market swings, equity mutual funds (MFs) continue to attract strong investor interest, with assets under management (AUM) climbing more than fourfold in the last five years. According to ICRA Analytics, equity MF AUM rose by 335% to Rs33.32 lakh crore in July 2025, compared with Rs 7.65 lakh crore in July 2020.
Systematic Investment Plans (SIPs) have played a central role in sustaining this momentum, helping investors manage volatility through disciplined, fixed monthly investments. This strategy, based on rupee-cost averaging, enables investors to accumulate more units when markets are low and fewer when markets are high, thereby reducing the emotional impact of market fluctuations.
Industry data from the Association of Mutual Funds in India (AMFI) shows inflows into equity MFs touched Rs42,673 crore in July 2025, a sharp turnaround from the net outflow of Rs3,845 crore recorded in July 2020. On a yearly basis, inflows grew 15% from Rs 37,082 crore in July 2024. Month-on-month, the growth was even steeper, with inflows rising 81% from Rs 23,568 crore in June 2025.
Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics, noted that the rise in inflows reflects investors’ growing willingness to take a long-term view. “Investors are recognising that short-term market fluctuations are part of the wealth creation journey. History shows markets tend to recover and reward patient investors over time,” he said.
Among categories, sectoral and thematic funds led the inflows at Rs9,426 crore, followed by flexi-cap funds (Rs7,654 crore) and small-cap funds (Rs 6,484 crore). Retail investors, in particular, are exploring diversified opportunities to capture growth and generate higher returns.
Kumar added that despite global uncertainties, Indian investors remain confident about the domestic economy. This optimism has translated into steady inflows into equity schemes, even during volatile phases.