Key mutual fund trends observed in July 2025

20 Aug 2025 , 12:59 PM

MUTUAL FUND BRIEFING – JULY 2025

July 2025 saw overall mutual fund AUM expand from ₹74.4 Trillion to ₹75.4 Trillion; supported by strong flows. Active debt funds saw net inflows of ₹1,06,801 Crore, with focus still at the short end. Active equity funds saw record inflows of ₹42,702 Crore; with alpha hunting back. However, action in hybrid funds and passives also really stood out.

Hybrid funds saw robust net inflows of ₹21,162 Crore, while passive fund inflows more than doubled MOM at ₹8,260 Crore. In equity funds, the demand thrust shifted sharply towards sectoral and thematic funds, with small and mid-cap funds still in demand. Gross SIP flows in July 2025 scaled a record of ₹28,464 Crore, while NFO flows were at a record ₹30,416 Crore.

KEY MUTUAL FUND TRENDS – SEGMENT LEVEL (JULY 2025)

Here are mutual fund segment level trends for July 2025.

• Average assets under management (AAUM) of all mutual fund schemes surged on MOM basis from ₹74.79 Trillion to ₹77.00 Trillion in July 2025. The AAUM is now at a new all-time high, with average AUM 19.0% higher yoy.
• Last couple of years saw steady shift in AUM mix from active debt to active equity; but intensity has reduced. The share of active equity funds in AUM for July 2025 was down 30 bps from 60.1% to 59.8% MOM; while AUM share is down just 10 bps yoy.
• Passive fund share was 20 bps lower MOM at 12.3% in July 2025 and 40 bps lower on yoy basis. The share of active debt funds was 30 bps lower MOM at 14.6% in July 2025 while share is flat yoy. Liquid / money market funds share expanded 70 bps MOM to 13.2% in July 2025, and 40 bps higher on yoy basis.
• The AUM shares of individuals and institutions had approximately stabilized, although the fall in equity prices saw individual share fall in July 2025. Between July 2024 and July 2025, the share of individual investors in overall MF AUM is down 80 bps at 60.2%. Individual share peaked at 61.9% in September 2024, and since stayed below that.
• How individual investors allocated across MF categories? As of July 2025, individual investors have a share of 33% in active debt funds but just 11% in short term money market schemes; a whopping 88% of equity fund assets, but 13% of passive assets.
• What about an individual investor’s allocation basket? As of July 2025, individual investors have 87% MF portfolio in active equity schemes and 8% in active debt funds. Liquid funds at 2% and ETFs at 3% are small. Institutions and corporates have 29% of corpus in liquid funds, 27% in passives, 25% in active debt funds and 19% equity funds.

As of July 2025, mutual fund AAUM grew 19.0% yoy. Assets of individual investors in this period grew 17.4% while AUM of institutional investors grew 21.4%.

KEY MUTUAL FUND TRENDS – FOLIOS AND TICKET SIZES (JULY 2025)

Folios are investor accounts unique to an AMC; an approximation of retail intensity.

• There were 24.57 Crore folios as of the close of July 2025 of which retail investors accounted for nearly 91.3%. In addition, HNIs accounted for 7.8% of folios while institutions accounted for the balance. In case of active debt funds, retail investors account for 72.0% of folios, while HNI investors account for 25.8%. HNIs also have high share of folios of liquid funds (24.3%) and hybrid funds at (24.2%).
• Between March 2009 and September 2014, mutual fund folios contracted from 4.76 Crore to 3.95 Crore. However, between September 2014 and July 2025, the number of mutual fund folios have jumped from 3.95 Crore to 24.57 Crore. That is a jump of 522% in folios. This is even after elimination of 1.43 Crore dormant folios this year.
• Let us look at average ticket size for equity and debt products. For equity funds (predominantly a retail product), the average ticket size is down -4% yoy at ₹1.99 Lakhs. For debt funds, average ticket size is up 11% yoy at ₹19.23 Lakhs. The net AUM of Indian mutual funds at ₹75.36 Trillion is spread across 24.57 Crore folios, giving a per folio ticket size of ₹3.07 Lakhs; with average ticket size of equity funds at ₹2.07 Lakhs.
• Contrary to popular perception, retail investors are not myopic in their approach to equity funds. As of July 2025, retail investors hold 55% of equity fund assets and 42% of non-equity assets for over 2 years. Retail investors have held 75% of equity funds for at least 1 year.

While retail investors have an average account size of ₹90,941, the HNI investors have an average account size of ͅ₹10,53,635.

KEY MUTUAL FUND TRENDS – GEOGRAPHICAL MIX (JULY 2025)

How are cities and towns contributing to the mutual fund growth story?

• The mutual fund market is divided into T30 (top-30) cities and B30 (cities beyond top-30). If you compare July 2025 with June 2025, T30 assets were up 2.97% at ₹62.81 Trillion. Total assets of B30 centres grew 2.91% to ₹14.20 Trillion. If we only look at the share of individuals; in July 2025, B30 cities accounted for 27.45% of individual assets while share of individuals in T-30 cities stood at 72.55%. Institutions have a T-30 bias.
• Despite the Direct route available since 2013, only 48% of overall assets came through the Direct route, with 27% of retail investors and 29% of HNIs investors. Here there is an improvement.

Clearly, direct investing is yet to pick up in a big way among individual investors, although individual investors are starting to see the cost benefits of direct investing.