Passive AUM gets a boost from inflows into equity and debt ETFs

14 May 2025 , 10:43 AM

PASSIVE FLOW HIGHLIGHTS FOR APRIL 2025

The month of March 2025 saw the first revival in passive flows, and that trend got reinforced in April 2025. Passive fund flows in April 2025 were 43% up over March at ₹20,229 Crore. The action in the month was dominated by inflows into domestic equity ETFs, debt ETFs, domestic index funds, and silver ETFs; in that order. Interestingly, gold funds and debt index funds saw net outflows in the month of April 2025.

Domestic equity index ETFs led the way with inflows of ₹9,216 Crore followed by debt oriented ETFs at ₹8,680 Crore, Domestic Index Funds at ₹3,125 Crore, and Silver ETFs at ₹1,066 Crore. Gold ETFs saw outflows. Among the categories that saw net outflows in April 2025 were Debt Index Funds (TMIF) and FOFs. Out of the 12 categories of passive funds with flows; 6 categories showed positive net flows and 6 saw net outflows. 

EQUITY INDEX FUND PERFORMANCE IN APRIL 2025

The table below ranks equity oriented index funds (direct) in India on 3-year returns. We have only considered funds where a 3-year track record is available.

Equity Index Funds Scheme Name	1 Year (%) Returns	2-Year (%) Returns	3-Year (%)  Returns
Axis Nifty Midcap 50 Index Fund	9.8465	28.4043	25.4355
MOSL Nifty Midcap 150 Index Fund	7.7981	27.3036	23.4769
ABSL Nifty Midcap 150 Index Fund	7.4339	27.2394	23.3598
Nippon India Nifty Midcap 150 Index Fund	7.5077	27.0135	23.2412
Navi Nifty Midcap 150 Index Fund	7.4848	26.9367	23.1537
ICICI Prudential Nifty Midcap 150 Index Fund	7.4343	26.8586	23.1064
ABSL Nifty Smallcap 50 Index Fund	4.7270	30.8906	21.4860
Axis Nifty Smallcap 50 Index Fund	4.2161	30.8752	21.3701
MOSL Nifty Smallcap 250 Index Fund	0.6512	26.0375	20.1119
ICICI Prudential Nifty Smallcap 250 Index Fund	0.2694	25.6362	20.0029

Data Source: Morningstar India

The equity index funds overall generated average returns of 5.073% over 1-year, 20.786% CAGR over 2-years, and 16.589% CAGR over 3-years. The top funds in the index category are predominated by mid-cap and small cap index funds, as they drove revival from the trough.

DEBT INDEX FUND PERFORMANCE IN APRIL 2025

The table below ranks Debt oriented index funds (direct) in India on 3-year returns. We have only considered funds where a 3-year track record is available.

Debt Index Fund Scheme Name	1 Year (%) Returns	2-Year (%) Returns	3-Year (%) Returns
Kotak Nifty SDL Apr 2032 Top 12 Equal Weight Index Fund	11.3917	9.0589	9.2584
BHARAT Bond ETF FOF – April 2032	11.3931	8.7868	9.2001
BHARAT Bond FOF April 2031	10.2161	8.4471	8.8351
BHARAT Bond FOF April 2030	10.4165	8.3627	8.8152
DSP Nifty SDL Plus G-Sec Jun 2028 30:70 Index Fund	9.7614	8.1780	8.2973
HSBC CRISIL IBX 50:50 Gilt Plus SDL Apr 2028 Index Fund	9.8007	8.1809	8.2467
Bandhan CRISIL IBX Gilt April 2028 Index	9.6255	8.0794	8.1888
ICICI Prudential Nifty SDL Sep 2027 Index Fund	9.5157	8.2092	8.1773
Mirae Asset Nifty SDL Jun 2027 Index Fund	9.3092	8.1082	8.1682
Axis CRISIL IBX SDL May 2027 Index Fund	9.2850	8.0918	8.1103

Data Source: Morningstar India

Debt index funds overall generated average returns of 9.688% over 1-year, 8.118% CAGR over 2-years, and 7.941% CAGR over 3-years. The top funds in the index category are dominated by longer tenure bond funds, gaining from the fall in bond yields. Debt fund performance was strongest in last one year due to conducive interest rate environment.

PASSIVE FUND FOLIO GROWTH: APRIL 2025 OVER APRIL 2024

Despite overall folio growth being under pressure, one must admit that the folio growth in passive funds continues to be robust.

Passive Mutual Fund Schemes (Folios)	Folios Apr-25 (in Numbers)	Folios Apr-24 (in Numbers)	Growth (%)
Silver ETF	7,47,622	2,20,436	239.16%
Equity oriented ETFs (International)	9,18,631	4,32,486	112.41%
Equity oriented Index Funds (Domestic)	1,26,10,365	75,09,935	67.92%
Equity oriented ETFs (Domestic)	1,61,59,666	1,12,58,767	43.53%
Gold ETF	71,44,848	51,83,711	37.83%
Other Index Funds	98,505	71,852	37.09%
Income/Debt Oriented Index Funds (TMIF)	1,83,455	1,47,588	24.30%
Income/Debt Oriented ETFs	24,02,803	21,18,038	13.44%
FOFs investing overseas in Active Funds	7,74,446	7,59,809	1.93%
Equity oriented Index Funds (International)	2,40,788	2,38,891	0.79%
FOFs investing overseas in Passive Funds	6,07,734	7,52,314	-19.22%
Debt Oriented Index Funds (Ex-TMIF)	9,106	15,130	-39.81%
Total of Passive Funds	4,18,97,969	2,87,08,957	45.94%

Data Source: AMFI (TMIF is target maturity index funds)

Here are some key inferences from the yoy growth in passive folios.

• Passive fund folios yoy growth in April 2025 stood 45.94%; compared to 48.31% in March, 50.15% in February, 50.92% in January, and 52.41% in December 2024. While there has been a tapering of folio growth, passive funds have done better than active funds on this count. Total folios of passive funds stood at 418.98 Lakhs as of April 2025; compared to 414.72 Lakhs in March, 409.23 Lakhs in February, and 398.62 Lakhs in January 2025; hinting at some pressure in folio growth.
  
• What about the leaders? Again, silver ETFs led folio growth at 239.16%, followed by equity oriented ETFs (International) at 112.41% and equity oriented Domestic Index Funds at 67.92%. A total of 10 out of 12 categories saw folio expansion, with FOFs investing in overseas passive funds and ex-TMIF debt oriented funds contracting.

Folio growth has stayed under 50% for the last two months in a row, but that could improve if the turmoil turns more investors away from active investing.

PASSIVE FUNDS AUM: APRIL 2025 OVER APRIL 2024

Despite the turmoil, the growth rate of passive funds AUM has been better in April, largely due to the positive stock market effect.

Passive Mutual Fund Schemes	AUM Apr-25 (₹ Crore)	AUM Apr-24 (₹ Crore)	Growth (%)
Silver ETF	15,477	5,660	173.43%
Gold ETF	61,422	32,789	87.33%
Equity oriented Index Funds (Domestic)	1,73,039	1,07,072	61.61%
Equity oriented ETFs (Domestic)	6,87,179	5,69,331	20.70%
Equity oriented ETFs (International)	12,700	10,724	18.43%
Equity oriented Index Funds (International)	4,921	4,307	14.25%
Income/Debt Oriented Index Funds (TMIF)	1,04,307	93,621	11.41%
Other Index Funds	3,640	3,346	8.77%
FOFs investing overseas in Active Funds	17,334	16,777	3.32%
Income/Debt Oriented ETFs	97,765	96,334	1.49%
FOFs investing overseas in Passive Funds	7,502	7,815	-4.01%
Debt Oriented Index Funds (Ex-TMIF)	6,299	14,709	-57.17%
Total of Passive Funds	11,91,585	9,62,484	23.80%

Data Source: AMFI (TMIF is target maturity index funds)

Here are some key inferences we can draw from the above table.

• Passive fund folios yoy growth in April 2025 improved 23.80%; compared to 22.72% in March, 18.78% in February, 26.63% in January, and 27.18% in December 2024. While the growth in AUM is still much lower than it was in year 2024, the good news is that the rate of growth in AUM has improved in the last 2 months.
  
• What about leaders and laggards? Silver ETFs led the growth at 173.43%, followed by Gold ETFs at 87.33%, and equity oriented domestic index funds at 61.61%. A total of 10 out of 12 categories saw AUM expansion, with the two FOFs investing in global passive funds and ex-TMIF debt oriented index funds witnessing AUM contraction.

The two key takeaways are that passive funds are seeing a revival in interest and folio growth for passives is doing better than active funds. Sentiments appear to be changing!