India’s mutual fund industry is witnessing an interesting divergence in 2025, while the number of new fund offerings (NFOs) filed has doubled year-on-year, the actual collections from these launches have seen a notable slowdown. The trend reflects a shift in investor behaviour amidst market volatility and evolving fund house strategies.
Amid fluctuating market conditions, mutual fund houses have significantly increased their draft filings with the Securities and Exchange Board of India (SEBI). As of now, a total of 64 NFO draft documents have been submitted in 2025, double the 32 filings recorded during the same period in 2024.
This surge has largely been led by growing interest in passive investment vehicles, particularly index funds and exchange-traded funds (ETFs). Out of the total filings in 2025, 21 are index funds and 15 are ETFs, compared to just 9 and 6, respectively, in 2024.
The trend suggests that fund houses are aligning their offerings with changing investor preferences towards low-cost, market-linked products during uncertain times.
Not limited to passive equity funds, the trend of increased filings has extended to debt mutual funds and hybrid schemes as well. With 11 debt fund filings so far in 2025—up from 8 in 2024, fund managers appear to be targeting investors looking for relative stability through fixed-income products.
Equity mutual funds continue to draw attention despite volatility. So far in 2025, 13 equity schemes have been filed, almost double the 7 filings in 2024.
While equity remains a core part of the product mix, the increase in filings has not been mirrored by investor inflows.
Several prominent names have been filed in the index and ETF category this year, reflecting thematic and diversified strategies:
The rise in passive product filings, from 5 passive NFOs in January 2025 to 18 in February 2025, clearly indicates where fund houses are placing their bets.
Despite the record filings, fund mobilisation from NFOs has declined. Between January and February 2025, 66 NFOs were launched (41 of them in the first 2 months), compared to 56 during January–March 2024 (42 till February-end).
However, according to AMFI data, collections have dropped to ₹8,573 crore in 2025, significantly lower than ₹18,537 crore in 2024 for the same period.
March 2024 had also contributed an additional ₹4,146 crore, underlining the magnitude of the decline in the current year.
Flows into equity mutual fund schemes have remained positive, but a month-on-month decline has raised eyebrows. In February 2025, equity inflows dropped 26% to ₹29,303.34 crore, compared to January.
Similarly, debt funds turned net negative, with outflows of approximately ₹6,526 crore, down from inflows of ₹1.28 lakh crore in January.
In a notable development, Axis Mutual Fund withdrew the launch of its Nifty 500 Momentum 50 Index Fund, just before it was scheduled to open. The fund house has not disclosed any reasons, raising questions about investor interest and timing.
As the mutual fund industry navigates through a dynamic environment marked by rising interest in passive products and weakening investor participation, the growing number of NFO filings signals optimism among fund houses. However, the declining trend in collections underscores the need to gauge investor sentiment more closely.
For now, the dichotomy between rising supply (filings) and slowing demand (collections) is a key trend that both industry participants and market observers will be watching closely in 2025.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 25, 2025, 2:27 PM IST
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