Investor allocations throughout mutual funds confirmed a transparent shift towards diversification and asset-allocation methods within the December 2025 quarter, at the same time as fairness funds continued to dominate total inflows.
In response to the Motilal Oswal Mutual Fund report The place the Cash Flows, the mutual fund business recorded estimated web inflows of about ₹1.74 lakh crore in the course of the quarter, reflecting continued investor participation regardless of macroeconomic uncertainties.
The business’s whole belongings beneath administration (AUM) stood at round ₹80.23 lakh crore as of December 2025, greater than six instances increased than a decade in the past.
“This highlights the structural shift in family financial savings in direction of monetary belongings, aided by SIP flows, larger digital accessibility and rising consciousness of mutual funds as a core funding automobile. December recorded SIP inflows of ₹31k crore,” mentioned the report.
Within the December 2025 quarter, the mutual fund business recorded estimated web inflows of ₹1.92 lakh crore. Lively funds accounted for ₹1.17 lakh crore, whereas passive methods accounted for ₹75,000 crore inflows. Fairness funds remained a big contributor, recording web inflows of ₹1.12 lakh crore. Inside equities, broad-based funds capturing 88% of lively flows and ₹98,000 crores in inflows, underscoring the investor tilt in direction of diversified methods. Massive-Cap Passive Funds, Flexicap Lively Funds and arbitrage methods accounted for a big share of flows in the course of the quarter.
Fairness funds nonetheless dominate flows
Fairness funds remained the most important recipient of investor cash, attracting about ₹1.12 lakh crore in inflows, accounting for roughly 58–64% of whole quarterly flows, although their share declined in contrast with earlier durations. Inside equities, broad-based funds captured practically 88% of fairness inflows, led by sturdy participation in large-cap and flexi-cap methods.
Key segments included:
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Passive large-cap funds: about ₹24,000 crore inflows -
Lively flexi-cap funds: about ₹22,000 crore inflows -
Mid- and small-cap funds: about ₹24,000 crore mixed inflows, although flows declined sequentially -
Arbitrage funds additionally attracted round ₹10,500 crore, making them the second-largest fairness circulation class in the course of the quarter.
The mutual fund business’s Property Beneath Administration (AUM) stood at ₹80.23 lakh crore as of December 2025, reflecting regular momentum in investor participation and an elevated choice for market-linked funding avenues.
Commodities and multi-asset funds achieve traction
One of many greatest shifts in the course of the quarter was sturdy investor curiosity in commodities and asset-allocation methods.
Commodity funds recorded about ₹33,000 crore in inflows, representing a 56% quarter-on-quarter enhance, signalling rising investor curiosity in diversification past equities.
Equally, multi-asset funds attracted about ₹20,000 crore, rising practically 39% quarter-on-quarter and accounting for roughly 70% of hybrid fund inflows, highlighting the rising recognition of diversified funding methods.
Total hybrid funds collected round ₹29,000 crore in inflows, although flows moderated in contrast with the earlier quarter.
Debt funds see marginal outflows
Debt mutual funds recorded marginal web outflows of about ₹1,000 crore in the course of the quarter, reflecting continued warning amid interest-rate uncertainty.
Throughout the debt phase:
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Fixed-maturity and dynamic bond funds collectively noticed about ₹5,000 crore inflows -
Goal-maturity and gilt funds noticed outflows of roughly ₹5,000 crore -
Liquid funds alone attracted about ₹27,000 crore, exhibiting continued demand for short-term parking of fund
The business has expanded over 6x within the final decade, with AUM rising from ₹12 lakh crore in 2015 to over ₹80 lakh crore in 2025
Passive funds proceed gaining share
Passive investing continues to develop steadily in India. Passive funds now account for round 18% of mutual fund AUM, with cumulative passive fairness flows reaching about ₹3.7 lakh crore between December 2020 and December 2025.
The report notes that each lively and passive funds stay engaging, with the quarter recording roughly ₹1.17 lakh crore in lively flows and ₹57,000 crore in passive flows.
“The December 2025 quarter highlights a multi-asset investor method, with important flows into equities, commodities and diversified methods. Whereas fairness retained investor favour via broad-based and systematic approaches, the commodity phase’s resurgence displays investor demand for inflation hedge and portfolio diversification. Passive investing continues to realize floor steadily, with passive funds accounting for 23% of fairness flows, however lively methods stay central to investor portfolios. Total, investor behaviour factors in direction of choice for broad-based and diversified publicity, aligned with structural development themes and evolving macroeconomic circumstances,” mentioned the report.
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