Mutual Fund Industry: January vs. February 2025
The mutual fund industry experienced notable shifts in February 2025 compared to January 2025. below are the key changes across different fund categories, highlighting trends in folios, funds mobilized, and net inflows.
Overview of Key Changes
In February 2025, the total number of mutual fund schemes increased from 499 to 507, reflecting a 1.6% growth. The number of folios also saw an uptick, rising from 16.05 crore to 16.23 crore, marking a 1.1% increase. However, despite the growth in schemes and folios, funds mobilized witnessed a significant decline, dropping by 18.3% from ₹66,630.08 crore to ₹54,428.97 crore. Similarly, total net inflow saw a sharp reduction of 26.2%, decreasing from ₹39,687.78 crore to ₹29,303.34 crore. Net Assets Under Management (AUM) also fell by 7.0%, indicating cautious investor sentiment.
Category-Wise Performance Analysis
The following is a breakdown of how different mutual fund categories performed:
- Multi Cap Funds: Folios increased by 2.3%, but net inflow dropped by 29.4%.
- Large Cap Funds: A 0.9% increase in folios was noted, while net inflow declined by 6.4%.
- Large & Mid Cap Funds: Folios rose by 1.3%, but net inflow suffered a 35.6% decline.
- Mid Cap Funds: Folios grew by 1.8%, yet net inflow fell by 33.8%.
- Small Cap Funds: Folios saw a 1.0% rise, but net inflow dropped by 34.9%.
- Dividend Yield Funds: Although folios increased slightly by 0.6%, net inflow plunged by 67.9%—the sharpest decline among all categories.
- Value/Contra Funds: A 0.9% increase in folios was observed, with a 13.4% decrease in net inflow.
- Focused Funds: The only category that recorded a 64.5% surge in net inflows, accompanied by a 2.7% rise in funds mobilized.
- Sectoral/Thematic Funds: Despite a 0.9% increase in folios, net inflow declined significantly by 36.7%.
- ELSS (Equity Linked Savings Scheme): Folios grew marginally by 0.2%, while net inflow dropped by 22.9%.
- Flexi Cap Funds: A 1.6% increase in folios was noted, but net inflow decreased by 10.4%.
Key Observations
- Focused Funds stood out as the only category to record a significant increase in net inflows (+64.5%).
- Dividend Yield Funds saw the most substantial decline in net inflows (-67.9%).
- Despite an overall increase in folios, the decline in funds mobilized indicates cautious investor sentiment.
- Sectoral/Thematic Funds witnessed the largest drop in funds mobilized, declining by 23.6%.
Although the number of mutual fund schemes and folios increased in February 2025, the overall decline in net inflows and funds mobilized suggests a shift in investor behavior, possibly due to market volatility. Focused Funds emerged as the only category with a positive trend in net inflows, whereas most other categories experienced declines. Moving forward, investor confidence will play a critical role in shaping mutual fund performance.