1. The month of August 2025 saw MF inflows of ₹52,501 Crore across categories. Here is a quick look at the key flow narratives.
2. Debt funds saw net outflows of ₹ (7,980) Crore largely dominated by redemptions in short-term liquid funds. It was also a shift to arbitrage funds.
3. Equity Fund inflows at ₹33,430 Crore were focused on flexi-cap, mid-caps, and small caps in that order; a clear sign of alpha hunting.
4. Hybrid funds saw net inflows of ₹15,614 Crore, while passive funds also saw robust inflows of ₹11,437 crore for the month of August 2025.
5. After a month of robust NFO collections in July, the NFO flows in August tapered to ₹2,904 Crore; led by thematic funds, mid-cap funds, and index funds.
6. SIP flows in August 2025 were marginally lower than July at ₹28,265 Crore, but the average SIP flows have risen in each of the last 5 years. 

Let us turn to how flow significance as a share of net AUM. 

When it comes to mutual funds, it is not just the absolute flows that matter; but two other points also matter a lot. Firstly, what is the significance of the flows of each category, with respect to the net AUM of that category? Secondly, whether the most significant flows have been positive or negative. That gives us a trend. Firstly,  let us look at the macro picture. 

Data Source: AMFI 

The overall significance of flows as a percentage of the net AUM is around 0.70%, which is not too significant. What is more relevant in this case is whether the top fund categories in terms of Flow/AUM significance are on the positive side or on the negative side.

In the case of debt funds in August 2025, out of the 16 fund categories, 7 categories saw net inflows while 9 categories saw net outflows. In terms of the five most significant flow categories, two were on the positive side while three were on the negative side. 

Data Source: AMFI 

As can be seen in the above table, three out of the most significant flows as share of AUM were on the negative side. In fact, on the negative side, only liquid funds are at the short end of the curve, while gilt funds and credit risk funds are at the longer end of the curve. The overall net outflows seen by debt funds in August 2025 was significantly influenced by the outflows from liquid funds. 

In the case of equity funds in August 2025, out of the 11 fund categories, 10 categories saw net inflows while only 1 category saw net outflows (dividend yield funds). In terms of the 5 most significant flow categories, all were in the positive. 

 Data Source: AMFI 

If you look at the five categories of equity funds with the most significant flow to AUM ratio, there are 2 investor themes that emerge. Firstly,  this theme is about alpha hunting which shows significant interest in mid-cap and small cap stocks, despite the macro risks. The second theme is about diversification, which is evident in the investor interest in multi-cap funds, flexi-cap funds, and large & mid-cap funds. 

In the case of hybrid allocation funds in August 2025, out of the 8 fund categories, all of them saw net inflows. In fact, hybrid flows had the highest flow/AUM significance as a category. In terms of the 5 most significant flow categories, all were in the positive. 

Data Source: AMFI 

 If you look at the five categories of equity funds with the most significant flow to AUM ratio, the broad theme is of allocation and managing risk. That explains the presence of funds like multi-asset allocation funds and equity savings funds. Regarding arbitrage funds, they are more of a shift from liquid funds by HNIs due to favorable tax treatment. 

In the case of hybrid allocation funds in August 2025, out of the 4 fund categories, all of them saw net inflows. In terms of the most significant flow categories, here is the list. 

Data Source: AMFI 

If you look at the top categories in terms of significance of flow / AUM ratio, gold funds at the top are not a surprise. The positive surprise is about FOFs investing overseas, which saw positive flows after a long time. In the index funds and index ETFs, the ratio is low, more due to the expanded base. 

To sum up, significant flows in August 2025 have largely been on the positive side. Of course, next month, we need to contend with quarterly debt fund treasury outflows!