ACTIVE DEBT AND EQUITY FUNDS TRIGGER INFLOWS IN JAN-25
If Dec-24 was about treasury outflows from active debt funds; January 2025 saw all those funds coming back into debt funds. In fact, Debt funds saw net buying of ₹1,28,653 Crore as money rushed back into liquid and money market funds. In addition, active equity funds saw robust inflows of ₹39,688 Crore, albeit lower on a sequential basis. Consequently, overall flows into mutual funds were extremely robust at ₹1,87,551 Crore.
Apart from active equity funds, passive funds and hybrid funds also witnessed robust inflows in January 2025. With active equity fund flows, sectoral and thematic funds dominated, followed by flexi/multi cap funds. The surprising part was the robust inflows of over ₹5,000 crore each into mid-cap and small cap funds. As inflows offset the price erosion in January 2025, overall MF AUM was marginally higher by 0.48% on sequential basis.
SIPS AND NFOS CRAFT JANUARY 2025 EQUITY FLOW STORY
Gross SIP inflows in January 2025 stayed above ₹26,000 crore for the second month in a row. However, the SIP inflows at ₹2,600 Crore in Jan-25 was marginally lower than ₹26,459 Crore in Dec-24. That is indicative of aggressive financialization of retail savings in India. The NFO story was relatively subdued in January 2025 collecting ₹4,544 Crore across just 12 NFOs. New fund offerings (NFOs) were robust in the month of January 2025 at ₹13,852 Crore across 33 NFOs; sharply higher than November. Flows into sectoral / thematic funds and small cap funds accounted for 85% of the overall NFO inflows in January 2025.
DOMINATING THE ₹1 TRILLION CLUB
The Trillion rupee club includes fund categories with over ₹1,00,000 Crore (or ₹1 Trillion) in AUM. Out of the 39 categories of open-ended funds, there are 22 open ended fund categories with AUM of over ₹1 Trillion. Out of the 16 active debt schemes, 6 categories are in the Trillion rupee club, with Overnight Funds just falling short of the mark. Significantly, 10 out of the 11 categories of equity funds are already in the ₹1 Trillion club. Index ETFs is the single largest category with AUM of ₹7.63 Trillion; followed by Liquid Funds (₹5.59 Trillion), Sectoral / Thematic funds (₹4.63 Trillion), and Flexi Cap Funds at ₹4.29 Trillion.
DEBT FUNDS REBOUND, BUT EQUITY FUNDS ROCK SOLID
Here is a quick look at monthly flows across fund categories in last 13 months.
| Month | Debt Fund Flows (₹ Crore) |
Equity Fund Flows (₹ Crore) |
Hybrid Fund Flows (₹ Crore) |
Passive Fund Flows (₹ Crore) |
Total MF Flows
(₹ Crore) |
| Jan-24 | 76,469 | 21,781 | 20,885 | 3,983 | 1,23,205 |
| Feb-24 | 63,809 | 26,866 | 18,288 | 9,756 | 1,18,351 |
| Mar-24 | (1,98,299) | 22,633 | 5,791 | 12,793 | (1,59,387) |
| Apr-24 | 1,89,891 | 18,917 | 20,110 | 11,505 | 2,39,233 |
| May-24 | 42,295 | 34,697 | 18,456 | 15,665 | 1,11,103 |
| Jun-24 | (1,07,358) | 40,608 | 9,039 | 14,602 | (43,109) |
| Jul-24 | 1,19,588 | 37,113 | 17,663 | 14,778 | 1,89,141 |
| Aug-24 | 45,169 | 38,239 | 10,233 | 14,599 | 1,08,123 |
| Sep-24 | (1,13,834) | 34,419 | 5,366 | 3,254 | (71,114) |
| Oct-24 | 1,57,402 | 41,887 | 17,189 | 23,428 | 2,39,907 |
| Nov-24 | 12,916 | 35,944 | 4,443 | 7,061 | 60,295 |
| Dec-24 | (1,27,153) | 41,156 | 4,703 | 784 | (80,355) |
| Jan-25 | 1,28,653 | 39,688 | 9,011 | 10,255 | 1,87,551 |
Data Source: AMFI (negative figures in brackets)
Active debt fund flows rebounded in January 2025; more than offsetting the outflows in December 2024. Equity fund inflows were tad lower at ₹39,688 Crore; but in the last 8 months, net equity fund inflows have averaged ₹38,632 Crroe per month. Other categories were also robust. Hybrid Funds (including solution funds) saw inflows led by arbitrage funds and multi-asset allocation funds. The passive funds saw net inflows spike to ₹10,255 Crore, led by index funds and a surprising surge of flows into gold funds.
HOW THE ₹67.25 TRILLION NET AUM ADDED UP?
As of the close of January 2025, mutual funds reported AUM of ₹67.25 Trillion. Here is the story of the AUM mix.
| Month | Debt AUM
(₹ Trillion) |
Equity AUM
(₹ Trillion) |
Alternate AUM
(₹ Trillion) |
Total AUM
(₹ Trillion) |
| Jan-24 | 13.77 | 22.50 | 16.17 | 52.74 |
| Feb-24 | 14.50 | 23.12 | 16.62 | 54.54 |
| Mar-24 | 12.62 | 23.49 | 17.02 | 53.40 |
| Apr-24 | 14.59 | 24.74 | 17.66 | 57.26 |
| May-24 | 15.12 | 25.40 | 18.13 | 58.91 |
| Jun-24 | 14.13 | 27.68 | 19.08 | 61.16 |
| Jul-24 | 15.44 | 29.34 | 19.92 | 64.97 |
| Aug-24 | 16.00 | 30.09 | 20.35 | 66.70 |
| Sep-24 | 14.97 | 31.10 | 20.75 | 67.09 |
| Oct-24 | 16.64 | 29.89 | 20.46 | 67.26 |
| Nov-24 | 16.86 | 30.36 | 20.60 | 68.08 |
| Dec-24 | 15.67 | 30.58 | 20.41 | 66.93 |
| Jan-25 | 17.06 | 29.47 | 20.46 | 67.25 |
Data Source AMFI
For January 2025, heavy inflows saw active debt fund AUM bouncing to ₹17.06 Trillion compared to ₹15.67 Trillion last month. Debt fund AUM is up 23.9% on yoy basis. The AUM of equity funds fell to ₹29.47 Trillion in January 2025 from ₹30.58 Trillion last month. It is still well below its September peak. Equity fund AUM higher 31.0% yoy. Alternate AUM is marginally higher MOM. Here is a look at the AUM shares of various categories of funds as of January 2025.
| Month | Active Debt Funds | Active Equity Funds | Hybrid Funds |
Passive Funds | Solution Funds | Close-ended Funds |
| Aug-24 | 23.98% | 45.11% | 13.70% | 16.80% | 0.80% | 0.40% |
| Sep-24 | 22.32% | 46.36% | 13.04% | 17.08% | 0.80% | 0.40% |
| Oct-24 | 24.74% | 44.45% | 12.98% | 16.67% | 0.78% | 0.40% |
| Nov-24 | 24.76% | 44.59% | 12.88% | 16.60% | 0.77% | 0.39% |
| Dec-24 | 23.42% | 45.68% | 13.10% | 16.61% | 0.79% | 0.40% |
| Jan-25 | 25.37% | 43.82% | 13.02% | 16.64% | 0.76% | 0.40% |
If you take a 5-month perspective (January 2025 over Aug 2024), active equity funds, hybrid funds and solutions funds; have all lost AUM share while active debt funds have gained AUM share. This is on account of the September 2024 peak effect.
ACTIVE DEBT FUNDS: AFTER THE REDEMPTION COMES THE RETURN
Debt funds saw net inflows of ₹1,28,653 Crore in January 2025. Big drivers of positive inflows were Liquid Funds ₹91,593 Crore, Money Market Funds ₹21,916 Crore, and Overnight Funds ₹18,937 Crore. Outflows were seen in short duration funds, Gilt Funds, and Floater Funds, albeit to a much lesser extent for the month.
ACTIVE EQUITY FUNDS: HIGH RISK THEMES ARE BACK IN DEMAND
In January 2025, equity funds saw robust net inflows of ₹39,688 Crore. Big drivers of inflows into equity funds were Multi-Cap / Flexi-Cap Funds ₹9,265 Crore, Sectoral / Thematic Funds ₹9,017 Crore, Small Cap Funds ₹5,721 Crore, Mid-Cap funds ₹5,148 Crore, Large & Mid Cap Funds ₹4,123 Crore, and large cap funds ₹3,063 Crore. None of the equity fund categories saw negative flows in January 2025.
HYBRID AND PASSIVE FLOWS BOUNCE BACK IN JANUARY 2025
The inflows into hybrid funds and solution funds nearly doubled to ₹9,010 Crore in January 2025. In the hybrid category, net inflows were dominated by Arbitrage Funds at ₹4,292 Crore, Multi-Asset Allocation Funds at ₹2,123 Crore and Dynamic Asset Allocation Funds (BAF) ₹1,512 Crore. Only conservative hybrid funds showed marginal outflows.
In the passive category; inflows were dominated by index Funds ₹5,255 Crore followed (surprisingly) by Gold Funds at ₹3,751 Crore and Index ETFs at ₹1,172 Crore. The passive category flows have spiked up sharply in January 2025.
Despite the uncertainty in the markets and the persistent sell-off by FPIs, the good news is that the long term mutual fund investor is not overtly perturbed. That is the good news!