Nippon Life AMC, HDFC AMC: Four reasons why mutual funds will continue to see impressive inflows

The fund inflows surged 81% to ₹42,702 crore in July, aided by contributions from thematic and flexi cap funds, data released by the Association of Mutual Funds in India (AMFI) showed on Monday, August 11.

Additionally, the latest fund infusion by investors marks the 53rd consecutive month of net inflows into the segment.

According to the data, equity-orientated mutual funds witnessed an inflow of ₹42,702 crore in July, a sharp increase from the ₹23,587 crore inflow seen in the preceding month.

The overall average assets under management, or AUM, of mutual funds in July 2025 increased by around 3% MoM to ₹77 lakh crore, led by strong inflow as capital market returns have softened, InCred Equities said in its report.

New funds launched also garnered the highest-ever inflow of ₹30,400 crore, of which around 50% is attributable to two funds of JioBlackRock. Debt funds saw a strong net inflow of ₹1 lakh crore with high mobilisation into liquid, overnight and money market funds, which accounted for nearly 86% of the net inflow.

"With the policy rate cut flowing through, we expect mutual fund inflow to continue to be high as fixed and savings deposit rates become unattractive," wrote Meghna Luthra, a research analyst with InCred Equities, in its report dated August 11, 2025.

Jatinder Pal Singh, CEO, ITI Mutual Fund, said, "This substantial rise underscores strong investor confidence and reflects the ongoing trend of reduced outflows from equity funds. Investors are taking advantage of market corrections to make investments. The robust inflows indicate positive market sentiment and sustained interest in equities as a key investment choice. We maintain a favourable outlook on the Indian economy, driven by resilient fundamentals and significant growth potential.”

SIP inflow touches a new high of ₹28,500 crore

The inflow touched a new high of ₹28,500 crore in July 2025, up by nearly 22% YoY and around 4% MoM. New systematic investment plans, or SIPs, registered were the highest in the last 12 months at 6.9 million, while accounts discontinued slowed to 4.3 million vs. 4.8 million in the previous month. SIP AUM declined by nearly 1% MoM to ₹15.2 lakh crore, the report notes.

What lies ahead?

Analysts expect the inflow momentum to pick up pace further in the near term and sustain the healthy level in the medium term, led by four factors.

• Higher participation from the retail segment;

• Higher understanding of market volatility;

• Rising investment discipline, along with incrementally higher inflow from B-30 cities.

B30 cities refer to the cities that are ranked beyond the top 30 (T30) cities in terms of their assets under management (AUM). The classification into T30 and B30 cities is part of a broader categorisation by the AMFI to segment the Indian market for mutual funds.

"We remain optimistic over the mid- to long-term horizon amid improving geographic penetration as well as the rising popularity of mutual fund schemes, mainly among the young and mid-income investors," Luthra says.

As regards AMC stocks, InCred Equities says Nippon Life India Asset Management looks promising for its consistent performance-led market share gains. "We appreciate the yield protection by HDFC AMC, although the recent run-up in the stock price makes the risk-reward ratio unfavourable," it says.

Further, Aditya Birla Sun Life AMC is expected to see a turnaround.