AMFI Key Takeaways: Mutual fund flows ease in August after July surge; SIPs and ETFs remain steady

Here are some of the key takeaways from this month’s AMFI numbers for equity investors:

SIP sees marginal dip

Systematic Investment Plans (SIPs) remained the backbone of retail flows, contributing Rs 28,265 crore in August, marginally lower than July’s Rs 28,464 crore. The number of contributing SIP accounts stood at 8.99 crore, with SIP AUM now over Rs 15.18 lakh crore, accounting for 20.2% of total mutual fund assets. Experts continue to view the number as a positive maintaining that the momentum for SIPs remains.

Equity funds continue to draw inflows

Equity-oriented mutual funds saw net inflows of Rs 33,430 crore, marking the 54th consecutive month of positive flows. Flexi-cap funds led with Rs 7,679 crore, followed by mid-cap funds at Rs 5,331 crore and small-cap funds at Rs 4,993 crore. Sectoral and thematic funds moderated sharply, dropping from Rs 9,246 crore in July to Rs 3,893 crore in August, even after accounting for Rs 1,422 crore mobilized by two new fund launches.

Himanshu Srivastava, Associate Director – Manager Research at Morningstar Investment Research India noted that "retail investors remained consistent in their allocations, undeterred by global volatility, growing optimism around India’s economic outlook, aided by reforms such as GST rationalization and expectations of corporate earnings recovery, further supported domestic equity flows.”

Market experts noted that the dip in flows compared to the last month come on the back of the number of NFO in the category. Suranjana Borthakur, Head of Distribution & Strategic Alliances at Mirae Asset Investment Managers, explained, “While equity flows have moderated marginally from Rs 42,000 crore to about Rs 33,000 crore, a large part of last month’s surge was driven by sectoral categories, with nearly Rs 7,000 crore coming from NFOs alone.”

In August 2025, the mutual fund industry launched 23 schemes, raising Rs 2,859 crore. Growth and equity-oriented schemes, including a mid-cap fund and two sectoral/thematic funds, mobilized Rs 2,056 crore. Three hybrid funds added Rs 183 crore, while 11 index funds and six ETFs, including gold and silver ETFs, raised Rs 620 crore.

Equity allocations shows tilt towards SMID caps

While flexi-cap funds continued to attract the largest inflows, experts noted a skew in overall equity allocations. Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital, observed, “The largest flows in equity were in the flexi-cap category. However, pure large-cap AUM remains lower than mid- and small-cap AUM, reflecting overallocation by retail into riskier segments. Investors would do well to reconsider their allocation.”

Srivastava from Morningstar added, “Diversification trends continued to shape investor behavior, with allocations spread across large-cap, mid-cap, and small-cap funds, and a clear tilt towards strategies with higher mid- and small-cap exposures.”

This, experts suggests that retail investors are favouring higher-risk segments of the market, even as large-cap schemes remain relatively underweight compared to their market share, highlighting the need for balanced portfolio allocation.

Commodity ETFs see strong inflows

Reflecting the diversification trend, Gold ETFs attracted Rs 7,200 crore, up sharply from around Rs 1,200 crore in July, while silver ETFs brought in Rs 1,759 crore, increasing AUM from Rs 22,963 crore to Rs 26,294 crore. Gold ETFs saw a seven month high in inflows and other ETFs saw a three-month high.

Borthakur said, “Gold ETFs have seen a sharp jump in traction, driven by both investors booking profits and fresh allocations from those fearing they might miss out. The flows suggest a more balanced approach, with diversification across equities, hybrids, and gold gaining ground depending on time horizons and risk appetite.”

Hybrid funds see slight decline

Hybrid schemes drew Rs 15,294 crore in net inflows, down from Rs 20,000 crore in July, mainly due to cooling arbitrage funds. Arbitrage funds contributed Rs 6,667 crore, while multi-asset and dynamic allocation funds added steadily.

Borthakur noted, “Hybrids too have eased, with inflows slowing from Rs 20,000 crore to around Rs 15,000 crore, largely due to arbitrage funds cooling off.”

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