Passive AUM hit by market correction, but folios robust in Feb-25

13 Mar 2025 , 02:28 PM

PASSIVE FLOW HIGHLIGHTS FOR FEBRUARY 2025

If passive flows were lacklustre in November and December 2024; a sharp revival was seen in January and February 2025. Apart from increasing interest in index funds and index ETFs, the credit for the revival in interest should also go to Gold ETFs. Net inflows into passive funds in February 2025 was flat at ₹10,249 Crore. Here is a look at the passive fund categories that saw robust inflows. Domestic equity index funds led the way with inflows of ₹3,807 Crore followed by Gold ETFs at ₹1,980 Crore, Equity Oriented Domestic ETFs at ₹1,944 Crore, and Debt Oriented ETFs at ₹1,463 Crore. Among the categories that saw net outflows in February 2025 were Debt Funds (ex-TMIR), FOFs investing overseas in passive funds, and Equity Oriented International Index Funds. Out of the 11 categories of passive funds with active flows; 8 categories showed positive net flows and 3 saw negative flows.

HOW INDEX FUNDS AND INDEX ETF PERFORMED IN FEBRUARY 2025

The table below ranks index funds and index ETFs in India on 3-year returns (regular plans). We have only considered funds where a 3-year track record is available.

Passive Fund Scheme Name	1 Year (%) Returns		3-Year (%) Returns		Launch (%) Returns
CPSE ETF	-0.46	33.71		15.02
Mirae Asset NYSE FANG+ ETF	27.10	33.47		21.65
Nippon India ETF Nifty PSU Bank BEES	-17.97	30.24		5.33
Kotak Nifty PSU Bank ETF	-17.98	30.23		4.56
ICICI Prudential Nifty Auto ETF	-0.13	28.43		20.76
Nippon India Nifty Auto ETF	-0.22	28.36		21.17
BHARAT 22 ETF	-2.86	27.53		14.18
Kotak Nifty Midcap 50 ETF	0.52	21.30		17.84
Motilal Oswal Nifty Midcap 100 ETF	1.34	20.34		14.33
Mirae Asset Nifty Midcap 150 ETF	2.30	19.87		20.42

Data Source: AMFI

There are a total of 205 index funds and index ETFs with minimum 3 year track record. These 205 funds have delivered average returns of 4.56% over a 1-year period. Over a 3-year period, the CAGR returns on these funds stands at 12.71%. Let us now shift focus to how the fund of funds (FOFs) have performed in February 2025.

HOW FUND OF FUNDS (FOF) PERFORMED IN FEBRUARY 2025

The table below ranks fund of funds (FOFs) in India on 3-year returns (regular plans). We have only considered funds where a 3-year track record is available and the other funds without such a track record have been eliminated.

Passive Fund Scheme Name	1 Year (%) Returns	3-Year (%) Returns	Launch (%) Returns
Mirae Asset NYSE FANG+ ETF FOF	32.48	34.73	25.24
ICICI Prudential BHARAT 22 FOF	-2.84	27.37	17.22
Mirae Asset Hang Seng TECH ETF FOF	101.39	21.45	9.26
Motilal Oswal Nasdaq 100 FOF	21.59	19.55	23.17
ICICI Prudential India Equity FOF	5.45	19.13	22.02
Kotak Nasdaq 100 FOF	14.21	18.36	14.10
Aditya Birla Sun Life NASDAQ 100 FOF	14.10	18.15	10.43
Invesco Global Equity Income FOF	16.98	17.92	9.72
Mirae Asset Nifty India Manufacturing ETF FOF	5.06	17.60	16.05
Mirae Asset S&P 500 Top 50 ETF FOF	18.88	17.24	14.85

Data Source: AMFI

There are a total of 101 fund of funds (FOF) with minimum 3 year track record. If you look at the average returns, these 101 funds have generated average returns of 12.15% over a 1-year period. Over a 3-year period, the CAGR returns on these funds stands at 11.20%. However, what is important is that in index ETFs, index funds and in FOFs, there are wide variations in terms of 3-year returns, which could be due to the disparate nature of funds.

PASSIVE FUND FOLIO GROWTH: FEBRUARY 2025 OVER FEBRUARY 2024

We see some good tidings from the folio growth numbers of passive funds in February 2025, despite the market stress. Table compares folio growth of 12 categories of passive funds.

Passive Mutual Fund Schemes (Folios)	Folios Feb-25 (in Numbers)	Folios Feb-24 (in Numbers)	Growth (%)
Silver ETF	6,39,430	2,06,893	209.06%
Equity oriented ETFs (International)	7,81,950	4,03,951	93.58%
Equity oriented Index Funds (Domestic)	1,24,33,482	67,62,068	83.87%
Other Index Funds	96,015	65,233	47.19%
Equity oriented ETFs (Domestic)	1,59,11,376	1,08,28,911	46.93%
Gold ETF	68,33,014	50,23,955	36.01%
Income/Debt Oriented Index Funds (Ex-TMIF)	18,842	15,175	24.16%
Income/Debt Oriented Index Funds (TMIF)	1,71,284	1,39,834	22.49%
Income/Debt Oriented ETFs	24,04,123	20,24,514	18.75%
Equity oriented Index Funds (Global)	2,47,619	2,31,734	6.85%
FOF investing overseas in Active Funds	7,63,712	7,73,161	-1.22%
FOF investing overseas in Passive Funds	6,22,243	7,78,820	-20.10%
Total of Passive Funds	4,09,23,090	2,72,54,249	50.15%

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 February 2025 stood at 50.15%; compared to 50.92% in January, 52.41% in December, 52.42% in November, and 49.71% in October 2024. The recent tapering is more due to a spike in SIP closure ratio. Total folios of passive funds stood at 409.23 Lakhs; compared to 398.62 Lakhs in January, 389.19 Lakhs in December, and 382.06 Lakhs in November 2024.
• What about leaders and laggards? Again, silver ETFs led folio growth at 209.06%, followed by equity oriented ETFs (International) at 93.58% and equity oriented Domestic ETFs at 83.87%. A total of 10 out of 12 categories saw folio expansion, with only FOFs investing in overseas active funds and FOFs in overseas passive funds contracting.

The good news is that folio growth in passive funds stays above 50%.

PASSIVE FUNDS AUM: FEBRUARY 2025 OVER FEBRUARY 2024

We have seen some pressure on AUM growth of passive funds in recent months due to the market correction. Here is the AUM compared yoy

Passive Mutual Fund Schemes	AUM Feb-25 (₹ Crore)	AUM Feb-24 (₹ Crore)	Growth (%)
Silver ETF	13,994.38	4,143.77	237.72%
Gold ETF	55,677.24	28,529.88	95.15%
Equity oriented Index Funds (Domestic)	1,49,842.90	93,923.45	59.54%
Equity oriented Index Funds (International)	5,605.76	4,286.32	30.78%
Equity oriented ETFs (International)	13,898.49	10,866.69	27.90%
Equity oriented ETFs (Domestic)	6,01,373.38	5,34,289.39	12.56%
FOF investing overseas in Active Funds	18,963.56	17,099.84	10.90%
FOF investing overseas in Passive Funds	8,623.57	7,832.47	10.10%
Other Index Funds	3,431.13	3,271.63	4.88%
Income/Debt Oriented Index Funds (TMIF)	96,083.42	93,629.32	2.62%
Income/Debt Oriented ETFs	97,602.17	95,535.41	2.16%
Income/Debt Oriented Index Funds (Ex-TMIF)	13,524.40	14,675.84	-7.85%
Total of Passive Funds	10,78,620.41	9,08,084.00	18.78%

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

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

• Passive fund folios yoy growth in February 2025 stood at just 18.78%; compared to 26.63% in January, 27.18% in December, 37.3% in November, and 42.87% in October 2024. The AUM growth of passive funds has surely taken a hard hit due to the overall market correction and the spike in SIP cancellations.
• What about leaders and laggards? Again, silver AUM led the growth at 237.7%, followed by Gold ETFs at 95.2%, and equity oriented domestic index funds at 59.5%. A total of 11 out of 12 categories saw folio expansion, with only debt index funds (ex-TMIF) contracting -7.85% in February 2025.

While the AUM growth has been hit by the weakness in the market, the positive takeaway is that the folio growth continues to be intact, and even robust.