Indian Investors Favour Hybrid Mutual Funds; Net Inflows Rise to Rs. 23,223 Crore in June

New Delhi – Indian mutual funds saw strong investor interest in June 2025, with hybrid schemes emerging as the most preferred option amid market volatility, according to a report released on Wednesday.

The mutual fund industry’s total Assets Under Management (AUM) soared to ?74.41 lakh crore, registering a 13.2% quarter-on-quarter and 22% year-on-year growth, supported by bullish equity markets and steady retail participation, as per data from the Association of Mutual Funds in India (AMFI), cited by ICRA Analytics.

In comparison, the total AUM stood at ?72.20 lakh crore in May 2025 and ?61.16 lakh crore in June 2024.

Investors increasingly turned to hybrid mutual fund schemes for their balanced risk-reward approach. The category witnessed record-breaking net inflows of ?23,223 crore, with arbitrage funds, multi-asset allocation funds, and balanced advantage funds leading the way.

• Arbitrage Funds: ?15,585 crore

• Multi-Asset Allocation Funds: ?3,210 crore

• Balanced Advantage Funds: ?1,886 crore

Meanwhile, equity-oriented mutual funds continued to attract robust inflows, with net investments rising to ?23,587 crore, a 24% increase over May 2025.

Among equity fund categories, the biggest contributors were:

• Flexi-cap funds: ?5,733 crore

• Small-cap funds: ?4,024 crore

• Mid-cap funds: ?3,754 crore

However, Equity Linked Savings Schemes (ELSS) saw a net outflow of ?556 crore, suggesting a drop in tax-saving investments following the financial year-end.

Systematic Investment Plans (SIPs) remained a cornerstone of retail participation. Monthly SIP contributions hit a record high of ?27,269 crore, marking a 28% year-on-year increase from ?21,262 crore in June 2024. As of June 30, 2025, there were 9.19 crore active SIP accounts.

The report attributes the surge in investor sentiment to the strong performance of key benchmarks like the Nifty 50 and Sensex, which further boosted market confidence.

In the debt category:

• Short-duration funds saw net inflows of ?10,277 crore

• Money market funds attracted ?9,484 crore

• Corporate bond funds received ?7,124 crore

On the other hand, liquid funds faced net outflows of ?25,196 crore, mainly due to typical quarter-end withdrawals, the report noted.

With inputs from IANS