The biggest decline in funds AUM since March 2020

Mumbai: Due to the steady decline in small and medium -sized shares in the secondary market, the perception of retail investors staggering has now turned to a boom in the mutual fund industry. Property under the industry’s AUM -management – in February 2025, recorded its biggest decline since March 2020, as investors were shocked by investing in mutual funds. In February 2025, the industry’s AUM declined by Rs 2.72 lakh crore to Rs 64.53 lakh crore. According to data from the Association of Mutual Funds in India (AMFI), this is the biggest decline in five years.

The industry lasts declined by Rs 5 lakh crore in AUM in March 2020, when the Nifty 50 index fell 23.3% in a single month after selling due to Corona epidemic. According to Amphi data, in February 2025, the total investment flow in equity funds declined by 26.5 percent to Rs 29,303 crore. The Sensex has been falling for five months due to the continuation of selling in Indian stock markets, declining by 6 percent in February and a total loss of 14.3 percent in five months by February 2025.

However, due to the systematic investment scheme (SIP) flow and overall market rally, the total AUM of the mutual fund industry crossed the Rs 50 lakh crore mark in December 2023. Since then, the total AUM of the industry has increased by about Rs 14 lakh crore. Of course, after Kovid-19, this sector has seen a decline of more than one lakh crore rupees only four times.

Amphi’s CEO Venkat N Chalsani said in a conference call that the decline in equity AUM could cause a mark-to-market improvement.

Investment flow for SIPs this month was Rs 25,999 crore. Which has decreased by 1.5 percent. The main reason for this is to be less day in February. After a strong performance in 2023, the Mutual Fund Industry maintained its growth pace in 2024, and recorded a significant jump in assets worth Rs 16.2 lakh crore. The credit for this growth was given to the boom in the stock markets, strong economic expansion and increasing participation of investors.

In February, the investment flow in equity mutual funds declined by 3.6 percent to Rs 39,687.78 crore as compared to January 2025. Investors have becomeware of high-risk investments of small-cap funds. Investment flow in small cap fund category declined by 34.9 percent to Rs 3722.46 crore. While the investment in the midcap fund segment has come down by 33.8 per cent to Rs 3406.95 crore. On the other hand, investment in largecap funds has also come down by 6.4 percent to Rs 2866 crore. Focused funds increased by 64.4 percent to Rs 1287.72 crore. Investment in sector/themetic funds decreased to Rs 5712 crore. In February 2025, the net investment flow in date mutual funds has come down to just Rs 6525.56 crore, compared to Rs 1.28 lakh crore in January. Investment flow in the ultra short duration fund category has reached Rs 4281.02 crore. While the money market funds made an investment of Rs 3275.97 crore, the liquid fund invested Rs 4976.97 crore, and in the corporate bond fund, an investment of Rs 1064.84 crore was made.

When and how much will the AUM of the mutual fund industry decrease?

Comparative investment flow in equity funds in two months

Investors started shutting down SIP: the ratio increased from 109% to 122%

With a sharp decline in shares, investors are facing difficult days of negative returns and there is also a difference in returns on investment in mutual funds, many investors have begun to shut down their systematic investment plan (SIP), as the figures of February 2025 show. The SIP closure ratio, which was 109 percent in January, increased to 122 percent in February 2025. This shows that instead of opening new SIP accounts, the rate of closing SIP accounts has increased rapidly. According to Amphi data, 44.56 lakh new SIP accounts were opened in February 2025. While 54.70 lakh SIP accounts have been closed by investors. However, this increase in the number of account closure is also due to the solution with the respective exchanges and the RTA, which are about 12-15 lakh accounts for the month of February.

The number of SIP accounts contributed to participation also fell from 8.34 crores in January to 8.26 crore in February. The increasing number of SIP closure has also had a direct impact on raising funds. In January 2025, the amount of funds raising was Rs 26,400 crore, which has come down to Rs 25,999 crore in February 2025.