Mutual Funds Investment / Investors are disillusioned with mutual funds, investment decreased by 22% in August

Mutual Funds Investment: The Indian mutual fund industry witnessed a significant decline in investment in equity mutual fund schemes in August 2025. According to the latest data from the Association of Mutual Funds in India (Amfi), net investment in equity mutual fund schemes in August stood at Rs 33,430 crore, down 22% from Rs 42,702 crore in July 2025. The main reason for this decline is believed to be the reduction in new fund offerings (NFOs). In this article, we will analyze the mutual fund investment trends of the month of August, the performance of systematic investment plans (SIPs), and data for different categories.

Decrease in investment in equity mutual funds

Net investment of Rs 42,702 crore was recorded in equity mutual fund schemes in July 2025, which declined to Rs 33,430 crore in August. This shows a decrease of about Rs 9,000 crore. Akhil Chaturvedi, Executive Director and Chief Business Officer, Motilal Oswal Asset Management Company, attributed the decline to the reduction in NFOs. According to him, the investor sentiment was affected due to the reduction in the number and attractiveness of NFOs. However, he also added that the remaining flow remains stable and healthy, which reflects the strength of the Indian mutual fund market.

SIP investment: Stable but lower than expected

Systematic investment plan (SIP) is an important part of mutual fund investment, which encourages small and regular investments. Investment in mutual fund schemes through SIP in August 2025 was around Rs 27,000 crore, which remained stable as compared to July. However, experts described it as lower than expected. Akhil Chaturvedi said that despite global uncertainties and selling by foreign portfolio investors (FPIs), Indian investors continuing to invest in equities is a positive sign for the market. This reflects the confidence of investors and long-term investment strategy.

Data by Mutual Fund Categories

• According to AMFI data, the investment trends during August 2025 across various mutual fund categories were as follows:
• Flexi cap funds: This category attracted the highest investment of Rs 7,679 crore. The flexibility and diversification of flexi cap funds continue to be popular among investors.
• Midcap funds: Investment of Rs 5,330 crore, which reflects investors' confidence in midcap companies.
• Smallcap funds: Investment of Rs 4,993 crore, which shows the interest of investors with high risk appetite.
• Sectoral/Thematic funds: Investment of Rs 3,893 crore, which reflects investors' interest in specific sectors.
• Largecap funds: Investment of Rs 2,835 crore, which reflects the preference of investors looking for stable and safe returns.
• Debt-based funds: This category witnessed net withdrawals of Rs 7,980 crore, reflecting investors' conservative strategy and anticipation of changes in interest rates.

Total investments and assets under management (AUM)

Overall, the mutual fund industry witnessed net inflows of Rs 52,443 crore during August 2025, significantly lower than Rs 1.8 lakh crore in July. Moreover, the assets under management (AUM) of the industry declined marginally from Rs 75.36 lakh crore in July to Rs 75.2 lakh crore in August. This decline could be a result of market volatility and reduced investment flows.