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Financial markets

Massive Net Outflow from Fixed-Income Mutual Funds in September 2025

Strategic Insights

— 1 min read

The Association of Mutual Funds in India (Amfi) reported a significant net outflow from fixed-income mutual funds in September 2025, totaling Rs 1.02 lakh crore. This substantial outflow dwarfs the modest redemptions of Rs 7,980 crore in August. The surge in outflows was primarily driven by large institutional withdrawals from liquid and money market funds. Out of 16 debt categories, 12 recorded net outflows during the month.

Key Takeaways:

  • The net outflow from fixed-income mutual funds in September 2025 was Rs 1.02 lakh crore, a sharp increase from Rs 7,980 crore in August.
  • Liquid funds witnessed the steepest outflow at Rs 66,042 crore, followed by money market funds with Rs 17,900 crore, and ultra-short duration funds with Rs 13,606 crore.
  • Low-duration funds recorded redemptions of Rs 1,253 crore, while short-duration funds faced a relatively modest outflow of Rs 2,173 crore.
  • The outflows were primarily led by large institutional withdrawals from liquid and money market funds, reflecting quarter-end liquidity adjustments and advance tax-related outflows.
  • Equity mutual funds saw inflows of Rs 30,421 crore in September, a 9% decline from Rs 33,430 crore in August.
  • The assets under management (AUM) of debt funds decreased by nearly 5% to Rs 17.8 lakh crore at the end of September from Rs 18.71 lakh crore in the preceding month.
  • Nehal Meshram, senior analyst from Morningstar Investment Research India, attributed the higher outflow to large institutional withdrawals from liquid and money market funds.

Statistics:

  • Net outflow from fixed-income mutual funds: Rs 1.02 lakh crore.
  • Outflow from liquid funds: Rs 66,042 crore.
  • Outflow from money market funds: Rs 17,900 crore.
  • Outflow from ultra-short duration funds: Rs 13,606 crore.
  • Redemptions from low-duration funds: Rs 1,253 crore.
  • Outflows from short-duration funds: Rs 2,173 crore.
  • Inflows into equity mutual funds: Rs 30,421 crore.
  • Decrease in AUM of debt funds: 5%.
  • AUM of debt funds (ending September): Rs 17.8 lakh crore.
  • AUM of debt funds (previous month): Rs 18.71 lakh crore.

Sources:

  • Times of India.
  • Association of Mutual Funds in India (Amfi).
  • Morningstar Investment Research India.
  • PTI (Press Trust of India).

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