Why are Indian investors flocking to hybrid mutual fund schemes with a net inflow of Rs 23,223 crore in June?
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Synopsis
In June, the Indian mutual fund sector witnessed significant growth, driven by substantial inflows into hybrid schemes. Investors are increasingly turning to these funds for stability amidst market volatility. This article explores the trends and factors shaping this investment landscape.
Key Takeaways
- Hybrid mutual funds are gaining popularity due to their balanced risk-reward profile.
- Total AUM reached Rs 74.41 lakh crore in June.
- Record net inflows of Rs 23,223 crore in hybrid schemes.
- SIPs reached an all-time high of Rs 27,269 crores in monthly contributions.
- Strong performance of Nifty 50 and Sensex boosts investor confidence.
New Delhi, July 23 (NationPress) In June, the Indian mutual fund sector experienced an impressive surge in inflows and robust investor engagement across equity, hybrid, and SIP segments, as noted in a report released on Wednesday.
The mutual fund industry's total Assets Under Management (AUM) reached a remarkable Rs 74.41 lakh crore, marking a 13.2 percent increase quarter-on-quarter and a 22 percent rise year-on-year. This growth was bolstered by optimistic equity markets and sustained interest from retail investors, according to ICRA Analytics, referencing data from the Association of Mutual Funds in India (AMFI).
In May 2025, the total AUM stood at Rs 72.20 lakh crore, compared to Rs 61.16 lakh crore in June 2024.
During this month, investors showed a strong preference for hybrid schemes, attracted by their balanced risk-reward profile amid market fluctuations, resulting in unprecedented net inflows of Rs 23,223 crore. Key contributors included arbitrage, multi-asset allocation, and balanced advantage funds.
Specifically, arbitrage, multi-asset allocation, and balanced advantage funds saw net inflows of Rs 15,585 crore, Rs 3,210 crore, and Rs 1,886 crore, respectively, as per the report.
Additionally, net inflows in equity-oriented schemes totaled Rs 23,587 crore, which is 24 percent higher than the inflows recorded in May 2025.
The report also highlighted that within the equity sector, flexi-cap, small-cap, and mid-cap funds experienced net inflows of Rs 5,733 crores, Rs 4,024 crores, and Rs 3,754 crores, respectively.
Conversely, ELSS funds faced a net outflow of Rs 556 crores, signaling a decline in tax-season demand.
According to the findings, systematic investment plans (SIPs) remained a cornerstone of retail investment, with monthly contributions reaching a historic high of Rs 27,269 crores, representing a 28 percent year-on-year increase from Rs 21,262 crores a year prior.
SIPs continue to be favored for long-term wealth accumulation, particularly among younger and first-time investors, as highlighted in the report. As of June 30, 2025, there were 9.19 crore active SIP accounts.
The strong performance of benchmark indices such as the Nifty 50 and Sensex further enhanced investor confidence.
Throughout the month, short-duration, money market, and corporate bond funds saw net inflows of Rs 10,277 crore, Rs 9,484 crore, and Rs 7,124 crore, respectively.
In contrast, liquid funds experienced a net outflow of Rs 25,196 crore due to quarter-end withdrawals, as reported.
Point of View
I believe that the current growth in hybrid mutual funds reflects a shift in investor strategy towards a more balanced approach to risk. While the statistics show exciting growth, it's crucial for investors to remain informed and discerning in their choices. Our commitment to delivering trustworthy insights aligns with the evolving landscape of the mutual fund industry in India.
NationPress
23/07/2025
Frequently Asked Questions
What are hybrid mutual funds?
Hybrid mutual funds are investment schemes that combine multiple asset classes, such as equity and debt, to provide investors with a balanced risk-reward profile.
Why did hybrid mutual funds see such high inflows in June?
The high inflows in hybrid mutual funds were driven by investor demand for stability during market volatility, along with a strong performance from key fund categories.
How do SIPs contribute to mutual fund growth?
SIPs, or Systematic Investment Plans, allow investors to contribute a fixed amount regularly, promoting disciplined investing and long-term wealth creation.
What is the total AUM of the Indian mutual fund sector?
As of June, the total Assets Under Management (AUM) in the Indian mutual fund sector stood at Rs 74.41 lakh crore.
Which sectors are performing well in mutual funds?
In June, sectors like flexi-cap, small-cap, and mid-cap funds reported significant net inflows, indicating strong investor interest.
