ETFs Surge: Mutual Funds Witness Highest Ever ETF Inflows in April

Exchange Traded Funds (ETFs) led the performance charts with record-breaking inflows of ₹19,056.66 crore in April the highest ever for a single month. This surge pushed the total assets under passive funds to ₹11.91 lakh crore, reflecting a 3.9% increase from the previous month. The growing popularity of ETFs underscores a clear shift toward low-cost, passive investment strategies. 

Unprecedented Growth in Passive and Systematic Investments 

Systematic Investment Plans (SIPs) also reached a new high, contributing ₹26,632 crore in April. Over the past six months, SIP assets have consistently accounted for 19.2% to 20.4% of the total mutual fund industry AUM, reflecting steady participation and a disciplined approach by retail investors. 

Gold ETFs, despite showing annual growth in AUM due to rising gold prices, saw outflows during April likely the result of profit booking as investors capitalized on recent price gains. 

Broad-Based Industry Expansion and AUM Growth 

The mutual fund industry's total assets under management (AUM) climbed to ₹69.99 lakh crore in April, a 6.47% increase from ₹65.74 lakh crore in March.  

This growth was supported by net inflows of ₹2.77 lakh crore and mark-to-market gains, as equity markets continued their upward trend. The Nifty 50 and Sensex delivered monthly returns of 3.48% and 3.67%, respectively. 

Debt funds were particularly strong, with AUM growing by 15.55% to ₹17.57 lakh crore surpassing the previous high of ₹17.08 lakh crore set in February. Net inflows into debt funds reached ₹2.19 lakh crore, reversing the previous month’s outflows of ₹2.03 lakh crore.  

This rebound was largely driven by expectations of declining interest rates, which made debt funds more attractive. 

Hybrid funds also gained ground, with AUM rising by 3.55% to ₹9.14 lakh crore, supported by inflows worth ₹14,247.55 crore and favourable market movements. 

Rising Investor Participation and Shifting Global Trends 

April saw the addition of 17.87 lakh new investor folios, bringing the total to 23.63 crore a 0.76% increase from the previous month. Equity funds were the primary drivers, adding 11.33 lakh folios, and now account for nearly 70% of the industry’s folio count. Passive categories, including ETFs and index funds, added 4.26 lakh folios and now represent 17.73% of the total. 

The industry also reported ₹20,229 crore in overall net inflows during the month, extending its streak of positive monthly flows to 54 consecutive months—a testament to growing investor trust in mutual fund products. 

Globally, however, the scenario was less optimistic. US-based debt funds saw inflows in Q1 of 2025, but March brought outflows due to hawkish commentary from the US Federal Reserve and ongoing geopolitical tensions. US equity and hybrid funds also experienced outflows under similar pressures. 

Read More: Best Gold ETFs in India for May 2025: SBI Gold ETF, HDFC Gold ETF, and More Based on 5Y CAGR. 

Conclusion 

April 2025 has proven to be a landmark month for India's mutual fund industry, characterised by record-setting ETF and SIP inflows, strong debt fund performance, and a surge in investor folio creation. The consistent upward trajectory in AUM and participation points to a broader shift in Indian savings behaviour towards structured, long-term, and market-linked investment strategies. 

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.  

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