Inflow in equity mutual funds dropped by 22 per cent to ₹33,430 crore in August, largely due to a sharp fall in new fund offers (NFOs) and global macroeconomic uncertainties.
Despite the decline, this marks the 54th consecutive month of net inflows into the equity segment.
Systematic Investment Plan (SIP) inflows also moderated slightly to ₹28,265 crore during the month, compared with ₹28,464 crore in July, data released by the Association of Mutual Funds in India (AMFI) showed on Wednesday.
Going by the data, equity-oriented mutual funds saw inflows of ₹33,430 crore in August, down from ₹42,702 crore in July.
Experts attributed the decline to a combination of lower NFO activity and global macroeconomic pressures, with tariff-related developments fuelling market volatility and prompting investors to take a more cautious approach.
“The lower impact of new flow viz previous month roughly ₹9,000 crore is to the extent of NFOs which were higher in July than August. Rest the flow momentum is steady and healthy,” Akhil Chaturvedi, Chief Business Officer of Motilal Oswal Asset Management Company, said.
Echoing this view, Suranjana Borthakhur, Head of Distribution & Strategic Alliances at Mirae Asset Investment Managers (India), pointed out that a large part of last month’s surge was driven by sectoral categories, with nearly ₹7,000 crore coming from NFOs alone.
Himanshu Srivastava, Principal, Manager Research at Morningstar Investment Research India, said that global uncertainties, including foreign investor outflows, caution over valuations, and the intensified tariff war between India and the US, may also have contributed to the softer pace in August.
Among categories, Flexi Cap Funds remained the biggest gainer, setting a fresh record with inflows of ₹7,679 crore in August, surpassing July’s high of ₹7,654 crore. Mid Cap Funds and Small Cap Funds continued to attract strong investor interest, recording inflows of ₹5,331 crore and ₹4,993 crore, respectively.
In contrast, Sectoral or Thematic Funds saw a sharp moderation, with inflows dropping to ₹3,893 crore in August from a record ₹9,246 crore in July, despite two new launches mobilising ₹1,422 crore. Large Cap Funds registered inflows of ₹2,835 crore.
A total of 23 schemes were launched in August 2025, all open-ended and across categories, raising a total of ₹2,859 crore, Venkat N Chalasani, Chief Executive, AMFI, said.
Apart from equities, hybrid schemes also saw easing flows, slowing to ₹15,294 crore from about ₹20,000 crore in July, mainly due to a cooling off in arbitrage funds.
Gold ETFs recorded strong inflows of ₹2,190 crore in August, up from ₹1,256 crore in July, marking the fourth consecutive month of positive traction.
On the other hand, debt schemes witnessed outflows of ₹7,980 crore during the month, after recording inflows of ₹1.06 lakh crore in July.
Overall, the mutual fund industry saw total inflows of ₹52,443 crore in August, way lower than ₹1.8 lakh crore in July.
The industry’s assets under management stood at ₹75.2 lakh crore at the end of August, compared with ₹75.36 lakh crore in July-end.