57 months of equity inflows

At the end of November 2025, the mutual funds industry’s asset under management (AUM) crossed INR80 lakh crore. This marked positive inflows into equity mutual funds for 57 months since March 2021, when the monthly inflow was just over INR9,000 crore, and the AUM stood at just over INR30 lakh crore. However, trends indicate that investors across equity, hybrid, and alternative mutual funds categories have continued to show strong confidence in professionally-managed portfolios, which reflect both the market performances, and rising retail participation.

Today, small investors are increasingly integrating mutual funds into their long-term financial plans, favoring goal-oriented, transparent, and disciplined portfolios. The mutual fund ecosystem continues to flourish through diversified strategies, and customised solutions, cementing its role as a cornerstone of sustainable and long-term wealth creation. “AMFI’s (Association for Mutual Funds in India) data for November shows strong… flows once again, and that strength is clearly feeding into equity market sentiment. This comes after almost a year of mostly sideways and dull markets.”

Between 2021 (in fact, since the middle of the pandemic year, 2020), and late-2024, the Indian equities, and equity indices have zoomed. They reached all-time highs in September 2024, after which navigating shares has become tough. As foreigners began to withdraw money, and turn net sellers in this calendar year, the indices and stocks became volatile, and the growth faltered. But the encouraging, and possibly surprising, part is that the inflows through SIPs (Systematic Investment Plans) by domestic retail investors continue to grow, and are now just shy of Rs 30,000 crore every month,” says Santosh Joseph, CEO, Germinate Investor Services.

In November 2025, according to AMFI’s data, mutual funds recorded net equity inflows of nearly INR30,000 crore, which pushed the AUM to more than INR80 lakh crore, with robust growth across large-cap, mid-cap, and small-cap funds. According to Sanjay Agarwal, Senior Director, CareEdge Ratings, despite the macroeconomic uncertainties, equity inflows remained positive for more than four-and-a-half years, witnessing massive net inflows in November 2025. More importantly, the equity categories registered inflows for the month, apart from the dividend yield funds, and ELSS funds.

A few interesting shifts are happening within the categories. Thematic funds, which dominated for most of 2024, began to cool off in the second half of 2024-25. “Sectoral/Thematic gross sales softened only because October was boosted by NFO-driven one-offs. The overall trend for November reflects a stabilising risk appetite, and stronger, broad-based net inflows across core equity categories,” says Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal Asset Management Company.

“Flexi-cap funds, which were less favoured earlier, are seeing renewed traction as investors rotate back into broader, more flexible equity strategies. Another steady trend is the rise in gold and silver funds, which are seeing consistent monthly inflows. The ETF and FoF structures there are clearly finding more acceptance,” explains Joseph. Over the past three months, between September and November 2025, the overall AUM rose from INR78-79 lakh crore to nearly INR81 lakh crore. Most of the incremental money and inflows came into equity, hybrid, and passive strategies, even as the inflows in debt funds turned choppy, and diverged from month to month.

“What stands out is that the small cap, sector/thematic, and flexi-cap funds continue to see rising folios alongside healthy NFO mobilisation in small cap, thematic, multi-asset, and passive offerings, signalling that retail investors are steadily embracing more diversified, higher beta, and solution-oriented mutual fund portfolios to play the India’s growth story,” says Robin Arya, Small-case Manager, Founder & CEO, GoalFi. During November 2025, 24 open-ended NFOs were floated, with sectoral/thematic funds accounting for 63 per cent of the share. Two dozen schemes were launched during the month, raising a total of INR3,126 crore.

Gold ETFs continue to witness healthy investor interest in November 2025, recording net inflows of INR3,741 crore, extending their streak of positive flows for the seventh consecutive month. “Although moderating from the unusually strong surge seen in September and October (this year), the latest figure still reflects sustained demand for gold-backed products in a market environment marked by elevated macro uncertainty and intermittent risk-off sentiment,” says Nehal Meshram, Senior Analyst, Morningstar Investment Research India. After a sustained surge, global gold prices softened slightly during the month as the US dollar strengthened. Despite this trend, the domestic investors maintained their allocations to gold ETFs, underscoring their growing role as a strategic asset for wealth preservation, hedge effectiveness, and portfolio diversification.

Debt mutual fund categories witnessed outflows, barring the ultra-short duration funds, low duration funds, money market funds, short duration funds, corporate bond funds, and floater funds. “There was a marginal net outflow in the debt category overall, but the AUM of the category remained steady at INR19.36 lakh crore for the month of November 2025, owing to MTM gains,” says Agarwal. India’s passive investing landscape continues to be strong, with AUM for passive funds increasing from INR13.72 lakh crore in November 2025. This reflects momentum, and a broader behavioural shift that has seen passive assets grow more than eight times since March 2020.

“The surge is driven by the structural evolution of the Indian markets. Greater financial penetration, and widespread real-time access to information have enhanced market efficiency, encouraging investors to embrace transparent, low-cost products that deliver index-linked outcomes. Supported by the seamless digital access, and a progressive regulatory environment, passive investing is rapidly emerging as a preferred choice in India’s asset management ecosystem,” says Hemen Bhatia, Executive Director & CEO, Angel One. The investors have become smarter and sharper.

Overall, even though 2025 was a difficult year, and the markets slowed down for most of the past 11 months, mutual funds remained the preferred investment option. “Investors are staying committed through SIPs, equity flows remain healthy despite volatility, and interest in gold and silver continues to climb. The resilience in flows is the strongest signal that the retail participation, and long-term investing habits are only getting stronger,” says Joseph. This is contrary to the behaviour of the foreign investors, who remained net sellers during the year. It seems like a war is on between the two sections.

As the accompanying article (Sidebar) on this page highlights, the divergence in the investing mindset can be explained through several factors. In the future, foreigners may emerge as net buyers, and domestic retail investors may turn part-sellers to book profits. Thus, 2026 will be an interesting year for Indian equities, even as some brokerage houses predict the beginning of another bull run. However, the battles between foreigners and Indians may decide the outcomes.