Perspective on Monthly Mutual Fund by Sanjay Agarwal, Senior Director, CareEdge Ratings

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Monthly Mutual Fund Perspective by Sanjay Agarwal, Senior Director, CareEdge Ratings

The mutual fund industry’s assets under management (AUM) saw a slight decline of 0.2% month-on-month, settling at Rs 75.19 lakh crore. Inflows decreased across all segments compared to July and were further impacted by mark-to-market (MTM) losses. The mutual fund industry recorded a net inflow of Rs 52,442.8 crore, down from Rs 1.79 lakh crore in the previous month.

Debt mutual funds experienced outflows of Rs 7,979.8 crore in August 2025, contrasting sharply with the Rs 1.06 lakh crore inflows seen in July. Liquid funds were the primary driver of these outflows, with redemptions worth Rs 13,350 crore. However, certain categories, such as overnight funds (Rs 4,951 crore inflows), money market funds (Rs 2,210.5 crore inflows), short-duration funds (Rs 565 crore), and low-duration funds (Rs 477 crore), saw positive flows. This trend reflects investor preference for short-duration instruments amid market volatility and interest rate uncertainties. Meanwhile, Credit Risk Funds continued their steady outflow trend.

Open-ended equity mutual funds maintained their 54-month streak of positive inflows, attracting Rs 33,430.4 crore, highlighting sustained investor confidence despite market fluctuations. However, Dividend Yield Funds recorded outflows. The lower inflows compared to July can be partly attributed to higher collections from New Fund Offers (NFOs) in the previous month (Rs 0.3 lakh crore). In August 2025, 23 open-ended NFOs were launched, raising Rs 0.03 lakh crore collectively, with sectoral/thematic funds dominating at 49.7% of the share.

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