The passive fund market witnessed an uptick in September, with AUM rising 3.9% month-on-month to Rs 12.99 lakh crore, driven by a surge in gold prices and fresh inflows into the category, which totaled Rs 19,057 crore, marking the 59th consecutive month of net inflows.
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Gold ETFs were the primary beneficiaries, attracting a record Rs 8,363 crore in inflows (forming 43.9% of total passive fund flows), fueled by a weaker local currency and heightened investor demand for safe-haven assets and a hedge against market volatility amid global uncertainties. Silver ETFs attracted inflows worth Rs 5,342 crore, accounting for 28% of total passive category flows.
The hybrid fund category witnessed moderate growth in September, with assets rising 2.5% month-on-month to Rs 10.33 lakh crore, driven by a net inflow of Rs 9,397 crore. Multi-asset allocation funds led the gains, with a 6.3% surge in assets to Rs 1.40 lakh crore, while equity savings funds and balanced hybrid funds saw increases of 4.5% and 2.0%, respectively. Multi-asset funds recorded the highest inflows and strongest asset growth in the hybrid category during the month.
The equity mutual fund category witnessed net inflows for the 55th consecutive month, amounting to Rs 30,422 crore in September. Despite volatility amid foreign institutional investor outflows and mixed cues from US-India trade developments, domestic investor sentiment remained strong. The market gained support from recent GST rate cuts and the US Fed rate reduction.The AUM of open-ended debt funds fell 4.9% month-on-month to Rs 17.80 lakh crore in September from Rs 18.71 lakh crore in August, driven by outflows as investors liquidated holdings to meet advance tax payments, a typical quarter-end trend. However, the decline was partially offset by MTM gains due to a slight easing of yields toward the end of the month.Easing fiscal concerns and worries surrounding GST reforms led to a substantial rise in bond yields at the beginning of September. Thereafter, yields remained in a narrow range for most of the month, with investors closely monitoring the borrowing calendar for the second half of the fiscal year, state debt supply, and monetary policy decisions by the Reserve Bank of India and the US Federal Reserve, the monthly note said.
SIP inflows reached a new all-time high of Rs 29,361 crore in September, marking a 3.9% month-on-month and 19.8% year-on-year growth. Reflecting this momentum, SIP assets rose to Rs 15.52 lakh crore, accounting for 20.5% of the industry’s total AUM—a 2.2% increase over the previous month and a 12.3% rise year-on-year. This underscores the strength of retail participation and growing investor confidence in systematic investing despite market volatility.
The mutual fund industry’s total assets rose to Rs 75.61 lakh crore in September from Rs 75.19 lakh crore in August, marking 0.6% month-on-month and 12.7% year-on-year growth. The rise was largely driven by mark-to-market (MTM) gains across asset classes, including equity, debt, and gold.
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The mutual fund industry added 30.14 lakh new folio accounts in September, taking the total folio count to 25.19 crore from 24.89 crore in August. Equity schemes and the Others category (largely comprising passive funds) added 13.9 lakh and 13.22 lakh folios, respectively. Together, these two segments accounted for more than 90% of the month’s new folio additions.
Global overview
The year-to-date (Jan–Aug 2025) mutual fund trends highlight contrasting investor sentiment between the US and Indian markets. In the US, investors remained cautious, with significant outflows from equity and hybrid funds, while debt funds attracted net inflows. In India, mutual funds saw robust participation across equity, debt, and hybrid categories, reflecting sustained investor confidence. Supportive factors such as the effective rollout of GST reforms and easing concerns over crude oil prices bolstered sentiment, encouraging continued investment across market segments despite periodic volatility.
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