India MF AUM Edges Down as Debt Funds See Outflows; SIPs Hit Record High

Mutual Fund AUM Moderates in December

India's mutual fund industry saw its assets under management (AUM) decrease marginally to ₹80.23 lakh crore in December 2025. This followed a figure of ₹80.80 lakh crore in November. The average AUM for December stood at ₹81.99 lakh crore. A primary driver for this moderation was the outflow from debt funds, utilized by corporations for liquidity management purposes. Valuation gains in equity markets were also limited, contributing to the overall AUM trend.

SIP Inflows Surge to All-Time High

Despite the overall AUM dip, systematic investment plan (SIP) contributions provided a robust counter-balance. After hovering around ₹29,400-29,500 crore monthly, SIP inflows climbed to an unprecedented ₹31,001.67 crore in December. This represents a significant increase of approximately 5% over recent monthly averages. The total assets managed through SIPs reached ₹16.63 lakh crore, accounting for 20.7% of the industry's total AUM. The number of active SIP accounts also grew to 9.79 crore.

Factors Influencing Market Sentiment

Industry experts pointed to specific reasons for the observed trends. Venkat Chalasani, Chief Executive of AMFI, confirmed the AUM moderation was driven by debt fund outflows and limited valuation changes. On a year-on-year basis, the industry AUM showed strong growth, up 19.9%, indicating wider investor adoption. However, equity-oriented schemes, despite recording their 58th consecutive month of net inflows since March 2021, saw the pace of inflows slow for the fifth straight month. Viraj Gandhi, CEO of SAMCO Mutual Fund, cited market nervousness due to delayed trade deals with the US, currency depreciation, foreign portfolio investor (FPI) outflows, and volatile equity valuations as reasons for this slowdown.

Debt Fund Outflows: Seasonal Rebalancing

Shriram AMC's MD & CEO, Kartik Jain, characterized the net outflows of approximately ₹66,500 crore in December as seasonal rebalancing rather than a fundamental shift in investor sentiment. These outflows were concentrated in short-term debt categories, including liquid, money market, and ultra-short duration funds. This behavior aligns with typical quarter-end corporate actions aimed at meeting advance tax obligations, finalizing balance sheets, and managing immediate liquidity needs.

Investor Interest Remains Strong in Equities and Hybrids

Gross sales for equity schemes rose about 7% month-on-month to ₹72,808 crore, while hybrid gross sales saw a nearly 17% increase to ₹16,548 crore. This indicates persistent investor interest in market-linked products. Equity funds secured healthy net inflows of around ₹29,500 crore, suggesting profit-booking rather than outright risk aversion. Flexi-cap funds, boosted by new fund offers, led equity inflows. Multi-asset allocation funds were strong performers in the hybrid category, recording peak gross sales of approximately ₹9,000 crore. Gold and silver-oriented funds also attracted substantial inflows, exceeding ₹10,000 crore, driven by a rally in precious metals.