Debt-oriented mutual funds posted a softer performance in August 2025 after staging a strong rebound in July. The moderation was led by liquid funds, which swung back into redemptions, and by weaker flows in money market and gilt schemes.
Overnight funds continued to attract money, but the pace slowed. Net inflows were about Rs 4,951 crore in August compared with Rs 8,866 crore in July and Rs 15,106 crore in August 2024. Their assets under management (AUM) held steady at Rs 86,297 crore, slightly higher than July’s base.
Liquid funds saw the sharpest reversal. After recording nearly Rs 39,355 crore in net additions in July, the category posted Rs 13,350 crore of outflows in August. AUM slipped marginally to Rs 5.32 lakh crore, though this still remained above August 2024 levels. Money market schemes also cooled, with inflows of Rs 2,211 crore in August versus Rs 44,574 crore the previous month.
Also read: Net equity inflow for August declines 21% to Rs 33,430 crore, shows AMFI data
Flows into shorter duration segments were mixed. Ultra-short duration funds added Rs 374 crore, lower than both July and August 2024. Low duration funds brought in Rs 477 crore, moderating sharply from Rs 9,766 crore a month earlier but improving on the net redemptions seen a year ago.
Longer duration and carry-oriented categories showed uneven performance. Short duration funds remained positive at Rs 565 crore, but medium-to-long and long duration schemes slipped into small outflows. Gilt funds posted outflows of Rs 928 crore after two straight months of additions. Credit risk funds stayed negative, and floater schemes too dipped into outflows.
Also read: Strong surge in net equity inflow for July at a record high of over Rs 42,700 crore, shows AMFI data
Overall, debt schemes closed August with outflows (Rs 7,979 crore) compared with July (inflows of 1.07 lakh crore), even though the aggregate AUM remained around Rs 18.7 lakh crore, higher than last year. The softer flows suggest investors rotated out after heavy July deployments, leaving August more subdued across most categories.
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