2025 marked a shift in investor preference when it comes to MF schemes.
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Net inflows into equity mutual fund schemes declined 6 per cent month-on-month to Rs 28,054 crore in December 2025 as a sharp rise in redemptions outpaced the growth in gross inflows.
Gross inflows rose 7 per cent to Rs 68,983 crore. But redemptions surged 18 per cent to a 17-month high of nearly Rs 41,000 crore in December, shows data released by the Association of Mutual Funds in India (Amfi).
The pace of equity fund inflows, according to experts, is in line with the trend seen in recent months.
“For the fifth month in a row, we have seen equity inflows slowing down from its previous 12-month average,” said Viraj Gandhi, CEO, SAMCO MF.
“Markets are nervous due to delay in the trade deal with the US, currency depreciation, foreign portfolio investor outflows and the rise in volatility,” Gandhi added.
According to Ankur Punj, managing director – business head at Equirus Wealth, investors are taking a cautious stance amid global uncertainties.
“The moderation is largely driven by global headwinds and rising geopolitical tensions, prompting investors to take a more cautious stance,” he said.
The net inflows into active equity schemes in 2025 — at Rs 3.5 trillion — are 10 per cent lower compared to the record high level of Rs 3.9 trillion in 2024.
The decline comes amid a muted performance in India’s equity markets in 2025, marked by heightened volatility, especially in the smallcap space.
However, systematic investment plan (SIP) growth story has remained intact throughout the year, even as one-time investments lagged and redemptions increased.
Gross SIP inflows stood at Rs 31,002 crore in December 2025, the highest ever, 17 per cent higher compared to December 2024.
“The record SIP inflow in December is a testament to SIPs increasingly becoming a way of life for Indian investors,” said A Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC.
2025 also marked a shift in investor preference when it comes to MF schemes. Flexicap funds, gold and silver offerings by MFs and multi-asset funds cornered the bulk of individual investor flows.
In 2024, sectoral and thematic funds along with midcap and smallcap funds were the most popular schemes.
Flexicap funds have consistently been at the top of the equity inflow chart. In December, they garnered over Rs 10,000 crore.
“With largecaps outperforming mid and smallcaps, flows have been more concentrated in the flexi-cap category,” said Ovas Bakshi, head-retail sales, Kotak Mahindra AMC.
“Multi-asset funds have also witnessed strong inflows as these funds can invest in equity, debt and commodities,” Bakshi added.
Multi-asset funds posted net inflows of Rs 7,426 crore last month.
Overall, the industry grew nearly 20 per cent in 2025 as its assets under management (AUM) rose to over Rs 80 trillion.
“On a year-on-year basis, industry AUM grew by 19.9 per cent. This reflects increased participation and continued adoption of mutual funds across investor segments,” said Venkat Chalasani, chief executive, Amfi.
Feature Presentation: Ashish Narsale/Rediff
