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Economic Times
7 days ago
- Business
- Economic Times
Passive funds gain traction: now 17% of India's Rs 74 lakh crore MF industry
India's mutual fund industry has witnessed remarkable growth, with total assets under management (AUM) reaching Rs 74.40 lakh crore as of the quarter ended June 2025, more than a sevenfold increase over the past decade. ADVERTISEMENT According to a recent study by Motilal Oswal Mutual Fund, this growth has been fuelled by structural reforms, increasing retail participation, and a shifting investment mindset that embraces both active and passive strategies. Equity mutual funds continue to dominate the industry, accounting for nearly 60% of the total AUM, followed by debt (26.53%), hybrid (8.28%), and other categories (5.26%). One of the key takeaways from the study is the growing preference for passive investing, which now accounts for around 17% of the industry's total AUM. While active funds still hold the lion's share, the rise of passive strategies highlights investors' increasing appetite for low-cost, transparent, and benchmark-aligned products. In the quarter ending June 2025, total net inflows stood at Rs 3.98 lakh crore, led by the debt segment, which attracted Rs 2.39 lakh crore — marking a reversal from the previous quarter's outflows. Equity funds brought in Rs 1.33 lakh crore, while commodities added Rs 9,000 crore. ADVERTISEMENT Within equities, broad-based funds were the most popular, attracting Rs 86,000 crore in net inflows and capturing 64% of total equity flows. Of this, 55% came from active strategies and an impressive 106% from passive funds. This underscores the growing allocation toward passive equity strategies, particularly in the large-cap segment. Among active equity categories, Flexi Cap funds led the pack with Rs 15,800 crore in net inflows, followed by Small Cap (Rs 12,000 crore) and Mid Cap (Rs 10,800 crore) funds. On the passive side, Large Cap funds remained the preferred choice, reflecting sustained interest in blue-chip companies. ADVERTISEMENT Thematic mutual funds experienced a net outflow of Rs 2,400 crore during the quarter, a sharp contrast to the Rs 8,400 crore inflow in the previous quarter. However, niche themes like Defence, Technology, and Business Cycle continued to attract capital, with the Defence theme alone drawing Rs 1,800 crore. ADVERTISEMENT The debt segment made a strong comeback, led by constant maturity funds, which brought in Rs 2.04 lakh crore in net inflows. Corporate bond funds also saw renewed interest, pointing to increased institutional allocations amid shifting interest rate the hybrid category, Multi Asset funds accounted for 57% of net inflows. Balanced Advantage Funds and Equity Savings Funds attracted Rs 4,200 crore and Rs 1,400 crore, respectively — highlighting sustained demand for balanced and risk-adjusted investment approaches. ADVERTISEMENT The quarter also saw 46 new fund offers (NFOs) launched, collectively raising Rs 6,506 crore. Interestingly, a significant portion of overall net inflows was contributed by five major AMCs, indicating a concentration of investor flows within a few large on the findings, Pratik Oswal, Head – Passive Business, Motilal Oswal Asset Management Company, said:'This quarter reflects a notable shift in portfolio allocation — a growing tilt toward well-diversified, resilient portfolios, complemented by a measured return to debt. What's particularly encouraging is the increasing traction seen in passive investing.'He added that investors are gradually recognizing the structural benefits of passive funds — simplicity, cost-efficiency, and alignment with market benchmarks. While active strategies continue to dominate, particularly in mid- and small-cap segments, passive funds are now emerging as a staple for long-term portfolios.'The conversation is no longer just about chasing alpha,' Oswal noted. 'It's about achieving portfolio stability in an ever-changing economic environment.' (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
04-08-2025
- Business
- Time of India
India's mutual fund industry clocks 7X growth in 10 years, equity funds garner Rs 86K crore in inflows: Motilal Oswal Mutual Fund Study
Live Events The Indian mutual fund (MF) industry stood at an AUM of Rs 74.40 lakh crore as of June 30, marking a more than sevenfold growth over the past decade. Equity commands the largest share at 59.94%, followed by debt at 26.53%, hybrid at 8.28%, and other categories accounting for 5.26%, according to a study by Motilal Oswal Mutual Fund Within equities, broad-based funds emerged as the dominant category, garnering Rs 86,000 crore in net inflows . This segment captured 64% of total equity flows, 55% from active funds and a notable 106% from passive funds , highlighting the growing allocation toward passive equity Read | Nifty slips into consolidation: What is the right strategy for mutual fund investors now? Among active broad-based funds, flexicap led with Rs 15,800 crore, followed by smallcap at Rs 12,000 crore and midcap at Rs 10,800 crore. In the passive space, largecap funds remained the most allocated segment, reflecting a continued focus on blue-chip benchmarks.A key development in the industry has been the steady rise of passive investing, which now accounts for approximately 17% of total AUM. While active funds continue to dominate in absolute terms, the growing share of passive strategies reflects broader adoption of low-cost, transparent, and benchmark-aligned the quarter ending June 2025, total estimated net inflows stood at Rs 39,800 crore. This was largely led by the debt segment, which drew Rs 23,900 crore, reversing the previous quarter's outflows. Equities contributed Rs 1.33 lakh crore, while commodities added Rs 9,000 crore. Active strategies accounted for Rs 36.2 lakh crore of total inflows, while passive funds contributed Rs 36,000 mutual funds , however, experienced net outflows of Rs 2,400 crore, in contrast to Rs 8,400 crore of inflows in the preceding quarter. Despite the overall drop, select themes such as Technology and Business Cycle attracted Rs 1,400 crore collectively, while the Defence theme alone garnered Rs 1,800 crore, reflecting increased allocation to macro-linked resurgence in debt funds was overwhelmingly led by constant maturity strategies, which saw Rs 20,400 crore in net inflows, followed by corporate bond funds, indicating higher institutional allocations amid evolving rate the hybrid segment, multi-asset funds accounted for 57% of the total net inflows within the category. Balanced Advantage Funds and Equity Savings Funds attracted Rs 4,200 crore and Rs 1,400 crore, respectively, indicating continued preference for balanced, risk-adjusted industry also saw active participation in new fund offerings, with 46 NFOs launched during the quarter, collectively mobilising Rs 6,506 crore. A significant portion of these inflows came from five asset management companies, indicating a degree of concentration in fund Read | SIP is always going to be better than an EMI : Deepak Shenoy of Capitalmind Mutual Fund says 'This quarter reflects a notable shift in portfolio allocation – a growing tilt toward well-diversified, resilient portfolios, complemented by a measured return to debt. What's particularly encouraging is the increasing traction seen in passive investing. Indian investors are gradually recognising the structural benefits of passive funds -- simplicity, cost-efficiency, and alignment with market benchmarks,' said Pratik Oswal , Head-Passive Business, Motilal Oswal Asset Management active strategies continue to command investor confidence, particularly in the mid- and small-cap segments, passive funds are steadily emerging as a key component of long-term a broader level, these trends point to an evolving investment environment: One that is more research-driven, risk-aware, and strategically focused. The conversation is no longer just about chasing alpha, but about achieving portfolio stability in an ever-changing economic landscape.
