The monthly mutual fund statistics showed that the assets under management (AUM) grew 23.11 percent on-year to Rs 65.67 lakh crore in March 2025, yet the equity funds continued to see a fall in month-on-month inflows owing to increased volatility.
The equity mutual funds saw a net inflow of Rs 25,082 crore, which was a 11-month low, owing to a number of reasons, including year-end redemptions and profit booking.
"We believe, profit booking was a major contributor. April outflows would be a better indicator to watch for gauging investor sentiment. We believe April is an opportunity for investors to increase their equity allocations and also expect redemptions to come down in April," Akhil Chaturvedi, Executive Director & Chief Business Officer, Motilal Oswal AMC said, when asked about the reason behind the decline in equity inflows for March.
Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India said that during march) market volatility was spurred by tariff concerns led to increased investor caution. especially after there were hints from US indicating an escalation of trade tariffs.
Another reason for a dip in equity inflows for the month was a lower number of new fund offers (NFOs) during the month, said experts.
Here are the key takeaways from this month’s AMFI report:
1. SIPs Robust, Stoppage Ratio Rises
Monthly SIP inflows reached a record Rs 25,926 crore in March, up 34.53 percent YoY, pushing total SIP assets to Rs 13.35 lakh crore, or 20.3 percent of total industry AUM.
More importantly though, the SIP stoppage continued to rise, with 51 lakh accounts discontinued versus 40 lakh new registrations. The SIP stoppage ratio for the month rose to 127.5 percent from 122 percent in February.
Total SIP accounts dropped marginally from 10.16 crore to 10.05 crore. According to AMFI's CEO Venkat Chalasani, the redemptions/closure numbers of SIPs continues to come as a result of removal of inactive accounts, as per the Sebi regulation.
2. Largecap Funds see Outflows, Mid and Smallcaps in Demand
While most categories saw positive inflows, large-cap funds witnessed net outflows of Rs 2,479 crore despite the AUM rising from Rs 3.25 lakh crore to Rs 3.59 lakh crore, largely on the back of market gains.
Small and midcap funds continued to see retail enthusiasm, with inflows of Rs 4,092 crore and Rs 3,439 crore, respectively. Largecap flows, according to some experts, could have fallen as investors looked towards flexicap and multicap categories (which have a largecap allocation) to invest in.
“Continued incremental inflows were mainly seen in Flexicap , Smallcap and Multicap, which is a positive sign, indicating a long-term investment approach by investors despite global and macroeconomic concerns,” said Jatinder Pal Singh, CEO, ITI Mutual Fund.
3. Thematic, Sectoral Funds Losing Sheen?
Despite a strong growth through the year, sectoral and thematic funds may be losing some of their shine. Though the category’s AUM rose from Rs 4.27 lakh crore to Rs 4.55 lakh crore YoY, March saw net flows of only Rs 170 crore, down from Rs 5,712 crore in February 2025. The industry body attributed the dip to increased market volatility and underperformance of certain sectoral/ thematic schemes along with lower GDP and earnings data.
4. Gold ETFs - First Dip in Months
In a surprise turn, gold ETFs recorded net outflows of Rs 77 crore in March from inflows of nearly Rs 1,980 crore in February, marking the first dip in several months. However, AUM rose to Rs 58,888 crore due to price appreciation of the yellow metal.
Experts, however, are not worried about a shift in the trend. "Gold is long seen as a hedge against inflation—and it will continue to be a favoured asset class. The dip we saw this month is largely a result of profit booking. Additionally, some investors may have exited gold ETFs as part of a broader portfolio rebalancing strategy. However, these short-term fluctuations are unlikely to have any significant long-term impact,” said Meshram while adding that gold’s appeal will persist due to its role as a hedge against market volatility and broader macroeconomic uncertainties.
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