Passive flows flatter in July 2025, led by equity and precious metals

12 Aug 2025 , 12:23 PM

PASSIVE FLOW HIGHLIGHTS FOR JULY 2025

After a tepid month of passive fund flows in June 2025 at just ₹3,997 Crore, the flows into passive funds more than doubled to ₹8,259 Crore in July 2025. The action in the month was dominated by inflows into domestic equity index ETFs, domestic equity index funds, Silver ETFs, and Gold ETFs. Debt based TMIFs, Debt Oriented ETFs saw net outflows in July 2025.

Domestic equity oriented ETFs led with inflows of ₹3,004 Crore; followed by domestic equity index funds at ₹2,773 Crore, Silver ETFs at ₹1,904 Crore, and Gold ETFs at ₹1,256 Crore. Precious metals seems to be the flavour, all over again. Out of the 12 categories of passive funds with flows; 8 categories showed positive net flows and 4 categories saw net outflows.

HOW EQUITY INDEX FUNDS PERFORMED IN JULY 2025

The table ranks equity oriented index funds (direct) in India on 5-year returns.

Equity Index Funds Scheme Name	1 Year (%) Returns	3Year (%) Returns	5-Year (%) Returns
Motilal Oswal Nifty Smallcap 250 Index Fund Direct	-3.74	23.01	29.44
Motilal Oswal Nifty Midcap 150 Index Fund Direct	-0.30	22.43	28.17
DSP Nifty 50 Equal Weight Index Fund Direct	-0.08	16.04	22.72
Sundaram Nifty 100 Equal Weight Dir	-3.80	15.82	20.74
Motilal Oswal Nifty Bank Index Fund Direct	10.30	13.51	20.73
Motilal Oswal Nifty 500 Fund Direct	-0.29	15.08	20.17
DSP Nifty Next 50 Index Fund Direct	-8.37	16.51	19.77
UTI Nifty Next 50 Index Fund Direct	-8.22	16.49	19.75
ICICI Prudential Nifty Next 50 Index Fund Direct	-8.56	16.35	19.63
LIC MF Nifty Next 50 Index Fund Direct	-8.23	16.44	19.57
Category Average	-2.45	15.30	18.86

Data Source: Morningstar India

In terms of 1-year returns, the equity index fund category overall generated average returns of -2.45%, while the average of the top-10 in this category stood at -3.13%. In terms of 3-year returns, the equity index fund category overall generated average returns of 15.30%, while the average of the top-10 in this category stood at 17.17%. In terms of 5-year returns, the equity index fund category overall generated average returns of 18.86%, while the average of the top-10 in this category stood at 22.07%. The leadership advantage gets more pronounced over the longer term.

HOW DEBT INDEX FUNDS PERFORMED IN JULY 2025

The table ranks Debt oriented index funds (direct) in India on 1-year returns.

Debt Index Fund Scheme Name	1 Year (%) Returns
BHARAT Bond ETF FOF – April 2032 Direct	10.33
Kotak Nifty SDL Apr 2032 Top 12 Equal Weight Index Fund Direct	10.23
Bandhan Crisil IBX 90:10 SDL Plus Glit April 2032 Index Fund Direct	10.21
Aditya Birla Sun Life CRISIL IBX SDL Jun 2032 Index Fund Direct	10.18
BHARAT Bond FOF April 2031 Direct	10.02
BHARAT Bond ETF FOF – April 2033 Direct	9.79
HDFC Nifty G-Sec July 2031 Index Fund Direct	9.68
Invesco India Nifty G-sec Sep 2032 Index Fund Direct	9.67
HDFC Nifty G-Sec Sep 2032 Index Fund Direct	9.66
Bandhan Crisil IBX Gilt April 2032 Index Fund Direct	9.65
Category Average	8.63

Data Source: Morningstar India

While debt index funds overall generated average returns of 8.63%; the top-10 debt funds generated average returns of 9.94%. The good news is that the dispersion of returns in the top-10 has been very low, which takes away the problem of choice for the investors. The top gainers are the gilt-funds, which have benefited from the falling bond yields in India in the last few months, especially the ones with a longer duration.

PASSIVE FUND FOLIO GROWTH: JULY 2025 OVER JULY 2024

Passive funds have consistently seen growth in folio numbers, although the pace of growth has slackened in recent months.

Passive Mutual Fund Schemes (Folios)	Folios Jul-25 (in Numbers)	Folios Jul-24 (in Numbers)	Growth (%)
Silver ETF	10,16,165	3,71,872	173.26%
Equity oriented ETFs (International)	9,47,518	5,08,487	86.34%
Equity oriented Index Funds (Domestic )	1,31,60,484	92,34,848	42.51%
Gold ETF	78,69,544	55,27,649	42.37%
Equity oriented ETFs (Domestic)	1,63,42,930	1,23,88,986	31.91%
Other Index Funds	1,00,783	79,109	27.40%
Income/Debt Oriented Index Funds (TMIF)	1,81,992	1,52,435	19.39%
Debt Oriented ETFs	25,03,714	22,20,851	12.74%
FOFs investing overseas in Active Funds	8,02,833	7,29,739	10.02%
Equity oriented Index Funds (International)	2,44,299	2,54,503	-4.01%
FOFs investing overseas in Passive Funds	5,88,201	6,97,547	-15.68%
Income/Debt Oriented Index Funds (Ex-TMIF)	11,257	14,781	-23.84%
Total (Passive Funds)	4,37,69,720	3,21,80,807	36.01%

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 July 2025 stood at 36.01%; compared to 41.44% in June, 43.29% in May, and 45.94% in April 2025. While there has been a gradual tapering of folio growth of passive funds, they have still done better than active funds on the folio front. Total folios of passive funds as of July 2025 stood at 437.70 Lakhs; compared to 431.42 Lakhs in June, 424.74 Lakhs in May, and 418.98 Lakhs in April 2025. The incremental growth has been slowing, but that could be due to the folio clean-up.
• What about the leaders? Again, silver ETFs led folio growth at 173.26%, followed by equity oriented ETFs (International) at 86.34%, equity oriented Domestic Index Funds at 42.51%, and gold ETFs at 42.37%. A total of 9 out of 12 categories saw folio expansion, with ex-TMIF debt oriented funds, FOFs investing in overseas passive funds, and International equity index funds witnessing folio contraction in July 2025.

Annual folio growth has stayed under 50% for the sixth month in a row.

PASSIVE FUNDS AUM: JULY 2025 OVER JULY 2024

AUM growth in July 2025 was impacted by the volatility in the markets, but that should  change once there is clarity on the tariff front.

Passive Mutual Fund Schemes	AUM Jul-25 (₹ Crore)	AUM Jul-24 (₹ Crore)	Growth (%)
Silver ETF	22,963	7,779	195.21%
Gold ETF	67,635	34,455	96.30%
Equity oriented Index Funds (Domestic )	1,87,532	1,39,883	34.06%
Equity oriented ETFs (International)	15,583	11,851	31.49%
FOFs investing overseas in Active Funds	21,295	16,916	25.89%
Equity oriented Index Funds (International)	6,024	4,857	24.02%
Equity oriented ETFs (Domestic)	7,08,612	6,54,856	8.21%
Income/Debt Oriented Index Funds (TMIF)	1,02,393	95,068	7.71%
FOFs investing overseas in Passive Funds	8,872	8,264	7.36%
Other Index Funds	3,695	3,521	4.95%
Debt Oriented ETFs	97,244	1,02,816	-5.42%
Income/Debt Oriented Index Funds (Ex-TMIF)	6,185	14,820	-58.26%
Total (Passive Funds)	12,48,034	10,95,084	13.97%

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

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

• Passive fund AUM yoy growth in July 2025 stood at 13.97%; compared to 20.36% in June, 24.45% in May, and 23.80% in April 2025. While the growth in AUM is sharply lower compared to year 2024, the overall AUM has been negatively impacted in July due to the market fall. For now, passive fund interest may be taking a back seat.
• What about leaders and laggards? Silver ETFs led the growth at 195.21%, followed by Gold ETFs at 96.30%, and equity oriented domestic index funds at 34.06%. A total of 10 out of 12 categories saw AUM expansion, with ex-TMIF debt oriented index funds and debt index ETFs witnessing AUM contraction in July 2025.

While the folio growth of passive funds is faltering, things are expected to improve once the lag effect of the clean-up wanes. Also,  AUM is more a function of market conditions.