The Association of Mutual Funds in India (AMFI) has released its February 2025 report, showing some key shifts in investor behaviour. While equity mutual funds continued to see positive inflows, debt funds witnessed significant outflows. Let’s break down the numbers and understand what they mean for investors.

Equity Mutual Funds: Positive, but Lower Inflows

Equity mutual funds attracted ₹29,303 crores in February, lower than the ₹39,688 crore inflow in January. While this marks a decline, investors are still putting money into equity markets, indicating a steady investment approach. The total assets under management (AUM) for equity funds stood at ₹127.4 lakh crore compared to ₹229.5 lakh crore in January, showing an overall dip due to market volatility.

Category-wise Inflows in Equity Funds

The drop in mid-cap and small-cap fund inflows suggests that investors are being cautious about high-risk stocks.

Debt Funds Face Heavy Outflows

Debt mutual funds saw a net outflow of ₹6,526 crore in February, a sharp contrast to the massive ₹1.28 lakh crore inflow in January. A major reason for this is redemptions in liquid funds, which recorded an inflow of only ₹4,977 crore compared to ₹91,593 crore in January. This shift could be due to quarter end adjustments and interest rate uncertainties.

On the other hand, corporate bond funds saw a positive inflow of ₹1,065 crore, reversing a previous outflow of ₹217 crore. This suggests that some investors are looking for stable returns in fixed income assets.

SIP Investments Remain Strong

Systematic Investment Plans (SIPs) continue to be a preferred mode of investing, though the numbers dipped slightly

Monthly SIP inflow : ₹25,999 crore (vs ₹26,400 crore in January)

Total SIP AUM: ₹12.38 lakh crore (vs ₹13.20 lakh crore in January)

Despite the minor decline, SIP investments remain a key driver of retail participation in mutual funds.

Other Key Trends

Hybrid funds (which invest in both equity and debt) saw an inflow of ₹6,804 crore, down from ₹8,767.5 crore in January.

Exchange-traded funds (ETFs) recorded ₹3,846 crore in inflows, up from ₹1,172 crore in January, indicating a growing preference for passive investing.

Credit risk funds saw an outflow of ₹198 crore, lower than the ₹294 crore outflow in January, indicating a slightly improved sentiment in high-risk debt funds.

Overall Industry Trends

Total mutual fund industry inflow: ₹40,063 crores (vs ₹1.88 lakh crore in January)

Net AUM: ₹64.5 lakh crore (vs ₹67.3 lakh crore in January)

The sharp drop in inflows suggests that investors are becoming cautious amid market fluctuations and economic conditions.

What This Means for Investors

Equity investments remain strong – Despite a decline, people are still investing in stock markets through mutual funds.

Debt funds are volatile – Outflows in debt funds indicate a shift in investor sentiment, possibly due to changing interest rate expectations.

SIPs continue to dominate – Even with a slight dip, SIPs remain a reliable option for long-term wealth creation.

ETF popularity is rising – More investors are shifting towards passive investment strategies.