According to Motilal Oswal Financial Services’ (MOFSL) latest Fund Folio – Indian Mutual Fund Tracker (September 2025), the Indian mutual fund industry witnessed a marginal dip in August 2025, with total AUM easing to Rs 75.2 trillion (-0.2% MoM) after hitting a record high in July.

The Nifty ended 1.4% lower MoM at 24,427 in Aug’25 – the second consecutive month of a decline. Notably, with extreme volatility, the index hovered ~816 points before closing 342 points lower. In Aug’25, DIIs posted the second highest ever inflows at USD10.8b following a record high in Oct’24.

FIIs recorded the second consecutive month of outflows at USD4.3b. FII outflows from Indian equities reached USD15.1b in CY25YTD vs. outflows of USD0.8b in CY24. DII inflows into equities remained robust at USD62.3b in CY25YTD vs. USD62.9b in CY24.

Total AUM of the MF industry, after scaling new highs in Jul’25 (Rs 75.4t), declined marginally in Aug’25 to Rs 75.2t (-0.2% MoM), primarily led by a MoM dip in AUM for equity (Rs 209b), liquid (-Rs 70b), other ETF (-Rs 22b), and Gilt (-Rs 16b) funds. Conversely, AUM of Gold ETFs increased Rs 49b, income funds rose INR36b, balanced funds grew Rs 25b, and arbitrage funds increased Rs 22b MoM.

Equity AUM for domestic MFs (including ELSS and index funds) declined 0.6% MoM to INR36.2t in Aug’25, led by a decline in market indices (with Nifty declining 1.4% MoM) and a decrease in sales of equity schemes (down 18.5% MoM to INR687b). The pace of redemptions slowed down to INR338b (down 14.1% MoM).

Consequently, net inflows moderated in Aug’25 to Rs 349b from Rs 450b in Jul’25. Investors continued to park their money in mutual funds as inflows and contributions in systematic investment plans (SIPs) stood at Rs 282.7b in Aug’25 (-0.7% MoM and +20% YoY).

Also Read: Equity Mutual Funds Surge 335% in 5 Years; Small-Caps Lead Returns

Sectoral Allocation Trends (MoM):

• Automobiles surged to a 10-month high weight of 8.5% (+50bp), emerging as the biggest gainer.
• Technology inched up to 7.9% (+10bp) after hitting a 14-month low in July.
• Private Banks slipped to a seven-month low of 17.5% (-50bp).
• Healthcare moderated to 7.6% (-20bp).

“Despite volatile markets, mutual funds continue to display strong domestic participation, with broad-based buying across large, mid, and small-cap segments,” MOFSL noted.