October Sees 19% Decline in Inflows Amid Redemptions
Net inflows into mutual fund equity schemes in India experienced a significant decline in October, dropping nearly 19% month-on-month to Rs 24,690 crore. This marks the third consecutive month of decreasing inflows, primarily attributed to profit-booking and increased redemptions as investors opted to cash out some of their gains. Despite this downturn, retail participation in Systematic Investment Plans (SIPs) and gold exchange-traded funds (ETFs) remained strong, reflecting a mixed sentiment in the market.
Decline in Equity Inflows
According to data released by the Association of Mutual Funds in India (Amfi), the overall mobilization under equity schemes fell to Rs 63,611 crore in October, down from Rs 66,404 crore in September. The rise in redemptions was notable, reaching Rs 38,920 crore in October compared to Rs 35,982 crore the previous month. Amfi Chief Executive V N Chalasani noted that there is no clear trend in investor interest, indicating a cautious approach among investors amid fluctuating market conditions. Despite the decline in inflows, the total assets under management (AUM) for equity funds increased to Rs 35.16 lakh crore at the end of October, up from Rs 33.68 lakh crore in September, driven by market gains and consistent SIP contributions.
SIPs and Debt Funds Show Resilience
In contrast to the equity schemes, Systematic Investment Plan (SIP) inflows demonstrated resilience, totaling Rs 29,529 crore in October, only slightly lower than September’s record of Rs 29,631 crore. The number of active SIP accounts rose to 9.45 crore, and the overall SIP AUM climbed to Rs 16.25 lakh crore, accounting for over 20% of the mutual fund industry’s total assets. Additionally, debt-oriented schemes saw a remarkable turnaround, attracting Rs 1.59 lakh crore in net inflows in October, a significant increase from the Rs 1.01 lakh crore outflows recorded in September. This shift is typical at the beginning of a new quarter, according to Chalasani. The overall mutual fund industry AUM grew by more than 5%, reaching Rs 79.88 lakh crore, bolstered by the strong performance of debt funds.
Gold and Silver ETFs Attract Investors
Investor confidence in gold-backed funds remained robust amid rising bullion prices. Gold ETFs recorded inflows of Rs 7,743 crore in October, bringing total assets in this category to over Rs 1.02 lakh crore, despite a slight decrease from September’s inflows of Rs 8,363 crore. Chalasani attributed this interest to gold’s appeal as a safe-haven asset during uncertain market conditions. Furthermore, silver ETFs attracted over Rs 3,000 crore, with the category’s AUM surpassing Rs 42,000 crore. This trend highlights a growing preference among investors for commodities as part of their investment strategy.
New Product Launches and Innovations
October also witnessed a surge in new mutual fund schemes, with 18 new products launched that collectively raised Rs 6,062 crore, a significant increase compared to the Rs 1,959 crore raised through nine schemes in September. Fund houses are actively developing new commodity ETF offerings, expected to be introduced within the next four months. Additionally, four new strategies for Specialised Investment Funds (SIFs), aimed at sophisticated investors with a minimum investment of Rs 10 lakh, were launched, raising Rs 2,007 crore in October. The overall SIF AUM now stands at Rs 2,010 crore, with over 10,200 folios. Chalasani also mentioned that Amfi is addressing technical issues that have delayed the reporting of micro SIPs, with regular updates anticipated starting in January 2026.
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