Multi asset category sees strongest inflows in March 2025: Motilal Oswal AMC Study
Multi Asset Mutual Funds
have continued to attract inflows in the hybrid category, securing approximately 74% of the net inflows during March 2025, according to Motilal Oswal Asset Management Company (MOAMC) latest study 'Where the Money Flows'.
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Balanced advantage and aggressive hybrid funds recorded healthy inflows of around Rs 2,000 crore and Rs 1,000 crore, respectively. Conservative Hybrid was the only category with a notable net outflow of Rs 500 crore, implying a reduced preference for debt-heavy hybrid allocations during the quarter.
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The report takes a closer look at how investors are allocating funds across different segments of the mutual fund (MF) industry for the quarter ending March 2025. The mutual fund industry recorded estimated net inflows of Rs 25,000 crore. While passive funds attracted Rs 33,000 crore in net inflows, active funds saw a net outflow of Rs 8,000 crore—largely due to redemptions in debtoriented categories rather than equity.
Debt funds witnessed Rs 1,10,000 crore in outflows, reversing from Rs 38,000 crore of inflows in the previous quarter. This was mainly driven by advance tax payments made by corporates, which led to major redemptions from Constant Maturity Funds (Rs 1,03,000 crore). The industry also witnessed 73 new fund launches, gathering Rs 13,067 crore through NFOs, a meaningful portion of the net inflows during the quarter.
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'The mutual fund industry's Assets Under Management (AUM) rose to Rs 65.74 lakh crore in March 2025, a robust 23.11% increase year-on-year from Rs 53.40 lakh crore in March 2024. The steady rise in Mutual Funds AUM reflects a gradual shift in household savings towards financial assets, supported by growing comfort with market-linked investments and a broader awareness of mutual fund products. Continued flows through Systematic Investment plans (SIPs) and a more accessible investment ecosystem have also contributed to the industry's sustained growth,' said Prateek Agrawal, MD and CEO of Motilal Oswal Asset Management Company Ltd (MOAMC) said.
'In FY25, passive funds saw a 21% year-on-year increase in AUM, rising 21% year-on-year to Rs 11.13 lakh crore. This growth was driven by the continued adoption of rule-based investing and the preference for low-cost structures. While equity-based passive products led the way, debt ETFs also saw modest growth with AUM at Rs 97,000 crores, indicating early signs of broader diversification within passive strategies,' said Pratik Oswal, Chief of Business Passive Funds, Motilal Oswal Asset Management Company Ltd (MOAMC).
During the quarter, equity funds remained the key contributor, with net inflows of Rs 1,17,000 crore, reflecting steady interest in long-term growth assets. Active Equity led the way with net inflows of about Rs 92,000 crore, followed by Rs 25,000 crore in passive equity. Passive equities now account for 21.5% of total net flows within the equity category.
Overall, at 64% of market share, Broad-Based funds took away the major share of equity net inflows. The net flows share of Broad-Based funds in passive equities increased from 66% to 84% (QoQ), while in active equities, it increased from 70% to 72%(QoQ). Among Active Equity, net inflows in Thematic funds continue to decline, settling at around Rs 9,000 Cr. Within Passive Equity, Broad-Based funds saw higher inflows, with Factor funds holding a 15% share and Thematic funds at 2.7%.
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Among the active broad-based segment, flexi cap and small cap funds saw net inflows of Rs 16,500 crore and Rs 12,000 crore respectively, followed by midcap funds at Rs 11,700 crore. For Passives, investors continued to prefer large cap for their allocations, with the category receiving 90% of net inflows. However, there was a marginal decline in the share of flows, with some shift towards the mid-cap and small-cap segments.
Overall, net inflows in thematic mutual funds declined from around Rs 14,000 crore to Rs 8,400 crore (QoQ). Consumption and Infrastructure themes together garnered inflows of around Rs 2,200 Cr in the thematic space, while the Manufacturing theme experienced a marginal outflow. Defence theme saw investor interest, with net inflows of around Rs 1,000 crore. Passively managed Thematic funds also witnessed the emergence of new themes like Capital Markets and EV
Debt funds saw Rs 1,10,000 crore in net outflows, a reversal from Rs 38,000 crore inflow last quarter. Constant Maturity funds dominated the outflows, making up around Rs 1,03,00 crore overall. This was followed by categories like Floating Rate and Gilt, recording outflows of around Rs 2,600 crore and Rs 2,500 crore, respectively. Target Maturity funds, on the other hand, recorded net outflows of around Rs 2,800 crore
Active Liquid funds witnessed net outflows of around Rs 52,000 crore, primarily driven by corporate advance tax disbursals in March. Passive Liquid Funds inflows stood at Rs 1,400 crore, reflecting steady institutional deployment. This was followed by Overnight & Ultra Short Duration categories, recording outflows of Rs 30,800 crore and Rs 12,400 crore respectively. Generally, investors use debt funds with maturity up to 1 year to park excess cash in the short term, leading to high volatility in inward & outward flows
The international category experienced minimal flows across segments, largely due to restrictions on new investments in such schemes imposed by the RBI threshold. Broad-based funds recorded marginal net inflows of Rs 100 crore. Passively managed thematic international Funds saw net outflows of Rs 800 crore.
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