2025 in review: SIFs make debut, Sebi overhauls MF regulations as equities, commodities lead gains

Systematic investment plan contributions held up throughout 2025. Monthly SIP inflows rose from Rs 26,400 crore in January to Rs 29,445 crore in November, crossing Rs 29,000 crore for the first time in September.

• Mutual fund AUM crossed Rs 80.5 lakh crore in Nov 2025, driven by steady inflows
• Sebi revamped mutual fund rules in 2025, capping expenses and simplifying disclosures.
• SIP inflows remained resilient, hitting Rs 29,445 crore in November 2025

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The Indian mutual fund industry saw a packed 2025, with product launches, new  fund houses, and regulatory changes by the Securities and Exchange Board of India (Sebi). Despite market volatility, the segment grew steadily, driven by strong retail participation, sustained Systematic Investment Plan (SIP)  inflows, and continued interest in equity, hybrid, and passive strategies, according to Association of Mutual Funds in India (AMFI) data.

Mutual fund inflows remain steady

Equity schemes remained popular, recording net inflows of Rs 3.22 lakh crore between January and November. Monthly inflows held strong, with Rs 29,911 crore in November, Rs 24,690 crore in October, and Rs 30,422 crore in September. Inflows peaked in July at Rs 42,702 crore, supported by retail sentiment and SIP contributions.

Debt funds, on the other hand, saw fluctuations. Net inflows for January–November were Rs 2.52 lakh crore, but November saw outflows of Rs 25,693 crore, after Rs 1.6 lakh crore in October. April and July recorded heavy inflows of Rs 2.19 lakh crore and Rs 1.07 lakh crore, respectively, while March saw outflows of Rs 2.03 lakh crore.

Hybrid schemes gained traction, collecting Rs 1.46 lakh crore in the first 11 months. November inflows stood at Rs 13,299 crore, after Rs 14,156 crore in October and Rs 9,397 crore in September.

Passive funds continue to see demand

Based on National Stock Exchange (NSE) data, passive funds continued to expand in FY26 (April 2025 to November 2025), with total Assets Under Management (AUM) reaching Rs 13.72 lakh crore, as of November 2025, accounting for 17 percent of overall mutual fund AUM. Year on year (YoY), asset growth remained intact, although inflow momentum moderated, with Rs 0.98 lakh crore mobilised in FY26 so far, compared with Rs 1.42 lakh crore in FY25.

Exchange Traded Funds (ETFs) remained the dominant segment, holding Rs 10.47 lakh crore in AUM and contributing Rs 0.85 lakh crore of net inflows during FY26 to date, while index funds accounted for Rs 3.25 lakh crore in AUM and Rs 0.13 lakh crore of inflows. Equity-oriented passive funds led the category at Rs 10.04 lakh crore, alongside allocations to debt (Rs 2.05 lakh crore) and commodities (Rs 1.6 lakh crore), reflecting the ETF-led and equity-centric nature of passive investing in India, as per NSE data.

MF AUM sees steady growth

Overall, mutual fund AUM crossed Rs 80.5 lakh crore in November 2025, supported by inflows across equity, hybrid, and passive categories, according to AMFI data. Equity AUM alone stood at Rs 35.66 lakh crore, reflecting sustained investor participation.

Open-ended equity funds have grown sharply over five years, from about Rs 9 lakh crore in November 2020 to Rs 36 lakh crore, as per ICRA data. Year-on-year, equity AUM rose over 17 percent. Flexi-cap schemes recorded the strongest growth, rising more than 25 percent to Rs 5.45 lakh crore. Multi-cap and large-and-mid-cap categories grew nearly 25 percent and 23 percent, respectively. Debt fund AUM expanded to around Rs 19 lakh crore amid volatile equity markets.

Performance remains mixed

Core equity funds delivered mixed returns on the back of a volatile and largely unpredictable market. Data from Value Research, as of December 29, shows that large-cap funds led with 7.9 percent YTD and 7.2 percent over one year, while flexi-cap, large-and-mid-cap funds posted low single-digit gains. Smallcaps were the weakest, down 6.3 percent YTD and one year.

Thematic equity performance was varied. Banking (17.5 percent YTD, 16.5 percent 1-year) and auto and transportation (15.7 percent YTD, 14.6 percent 1-year) outperformed, while technology (-6.6 percent YTD, -7.2 percent 1-year) and pharma (-3.4 percent YTD, -2.0 percent 1-year) lagged. Commodities dominated, with silver up 161.9 percent YTD and 155 percent over one year, and gold rising 78.3 percent YTD and 77.1 percent over one year.

SIP flows remain resilient 

SIP contributions held up throughout 2025. Monthly SIP inflows rose from Rs 26,400 crore in January to Rs 29,445 crore in November, crossing Rs 29,000 crore for the first time in September.

SIP stoppages climbed earlier in the year. The ratio rose from 109 in January to 122 in February, 128 in March, and peaked at 296 in April. It moderated to 76 in September, 75 in October, and 76 in November, suggesting fresh registrations offset exits.

SIFs make their debut

Specialised Investment Funds (SIFs), approved by Sebi, debuted in 2025 to bridge the gap between traditional mutual funds and portfolio management services. Minimum investment is Rs 10 lakh. By November, five active schemes were available, including hybrid long-short, sector rotation long-short, and equity long-short funds. Tata AMC, Quant MF, SBI MF, Edelweiss AMC, and ITI AMC launched products, with more expected in 2026. As per AMFI data, the total AUM of SIFs was around Rs 2,900 crore from 5 schemes.

New mutual funds enter

The total number of mutual fund houses crossed 45, including new entrants like Abakkus MF, Capitalmind Mutual Fund, Choice MF, and Jio BlackRock Mutual Fund, reflecting sustained interest in the asset management space.  Year 2026 is expected to see more such launches, including mainstay AIF/PMS names like Nuvama AMC.

Sebi announces regulatory overhaul

Sebi implemented a broad overhaul of mutual fund regulations in 2025 to improve transparency, simplify costs, and strengthen investor protection. As reported by Moneycontrol, the regulator revised the total expense ratio (TER) framework, including tighter TER caps for select schemes, rationalisation of B30 incentives, and lower expense limits for passive funds.

Also read: Mutual fund industry welcomes B-30 incentive revival but expects limited flow benefit

Brokerage limits were capped at 6 basis points for cash equities and 2 basis points for derivatives, with performance-linked expenses allowed under certain conditions. Sebi also introduced streamlined disclosures, reduced filing requirements, and stricter norms around scheme categorisation and naming.

Also read: More favourable expense ratio, higher brokerage cap welcome relief for MFs, brokerages

Additionally, Sebi announced that Real Estate Investment Trusts (REITs) would be classified as equity from January 1, 2026, allowing mutual funds to include REIT exposure within equity allocations, potentially boosting participation in the asset class.

B30 growth

According to ICRA data, in November 2025, close to 27.52 percent of assets held by individual investors was from the B30 locations while 4.76 percent of institutional assets came from B30 locations.

In comparison, in November 2024, 27.04 percent of assets were held by individual investors from B30 locations and 4.66 percent of institutional assets from B30 locations.  The report added that during November 2025, 29.45 percent of High Net Worth Individual (HNI) assets were directly invested, compared to 27.57 percent in November 2024. Additionally, 48.31 percent of the mutual fund industry's assets were invested directly as against 46.22 percent in November 2024, and 45.49 percent came from Non-Associate Distributors in November 2025 as compared with 47.06 per cent in November 2024.