Equity Mutual Fund Inflows Dip 21% in August, But SIPs Soar to New High

August 2025 painted a mixed picture for the Indian mutual fund landscape, as equity mutual fund inflows experienced a notable 21% month-on-month decline, settling at Rs 33,430 crore. This figure, released by the Association of Mutual Funds in India (AMFI), marks a moderation following robust inflows witnessed in previous months, specifically June and July 2025.

The dip comes after a period of significant investor enthusiasm.

In June, equity funds had attracted a substantial Rs 59,885 crore, which then tapered slightly to Rs 47,890 crore in July. While the August numbers represent a cooling off, it's crucial to view this within the broader context of the market's performance and investor sentiment.

Despite the overall slowdown in equity fund inflows, certain segments continued to demonstrate resilience.

Small-cap funds, a consistent favorite among investors, once again led the pack by attracting the highest net inflows, albeit at a slightly reduced pace. This indicates a sustained appetite for high-growth potential stocks from this segment. Mid-cap and large-cap funds also saw positive inflows, though their contribution was more modest compared to previous months.

Interestingly, sectoral/thematic funds bucked the trend by witnessing net outflows, suggesting a cautious approach from investors in niche segments.

A shining beacon in the August data was the remarkable performance of Systematic Investment Plans (SIPs). Demonstrating unwavering commitment from retail investors, SIP contributions reached an all-time high of Rs 20,900 crore.

This consistent flow of capital through SIPs underscores the power of disciplined investing and retail investors' long-term outlook on the Indian equity market, regardless of short-term fluctuations.

Beyond equities, debt mutual funds experienced a significant surge in inflows during August 2025, attracting Rs 1.7 lakh crore.

A substantial portion of these inflows was directed towards safer havens such as overnight funds and liquid funds, which collectively garnered over Rs 1.5 lakh crore. This movement suggests that some investors might have preferred parking their money in less volatile assets amid market uncertainties or for short-term liquidity management.

The overall Assets Under Management (AUM) for the entire Indian mutual fund industry also saw a healthy increase, reflecting the growing trust and participation in various investment avenues.