The mutual fund industry witnessed a notable decline in equity fund launches in the first half of 2025, marking a significant contrast to the bullish sentiment seen in 2024.
As per data from the Association of Mutual Funds in India (AMFI), only 29 open-ended equity schemes were launched between January and June 2025, collecting ₹12,543 crore, compared to 37 schemes that raised ₹38,655 crore during the same period last year.
In 2024, the mutual fund sector saw a record 81 equity new fund offers (NFOs), collecting ₹94,548 crore, buoyed by strong equity market performance until September. Fund houses tapped into booming investor sentiment by introducing thematic funds across sectors like defence, tourism, energy, manufacturing, and realty.
However, 2025 began on a far less optimistic note, as markets flattened and volatility rose, particularly following the correction from October 2024 to March 2025. Many of last year’s funds experienced losses or underperformance, causing investors to pull back from fresh equity investments, as per The Economic Times report.
With regulations preventing multiple schemes in the same equity category, mutual funds have turned to launching funds under niche themes to maintain product pipelines. Some fund launches were also designed to reward distributors, who often move investors into newer schemes that carry higher expense ratios compared to long-held ones, the report added.
This marks a significant drop from H2 2024, when 44 schemes raised nearly ₹56,000 crore.
Read More: Liquid, Overnight Funds See Sharp Outflows in May–June Amid Seasonal Withdrawals.
The slowdown in equity NFO launches in 2025 reflects a more cautious approach by both investors and fund houses. While the record fundraising seen in 2024 was driven by bullish sentiment and thematic opportunities, the first half of 2025 suggests a return to fundamentals, with investor confidence likely to hinge on broader market stability and consistent fund performance going forward.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. 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 are subject to market risks, read all scheme-related documents carefully.
Published on: Jul 18, 2025, 10:21 AM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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