The slowdown has been most pronounced in new fund launches. Total NFO collections in 2025 stood at Rs 63,631 crore, compared with Rs 1.18 lakh crore in 2024. Within this, active equity NFOs raised Rs 29,148 crore through 51 launches, sharply lower than Rs 91,118 crore mobilised via 69 active equity NFOs last year. The decline suggests waning appetite for new thematic and sectoral launches, especially amid corrections in mid- and small-cap stocks.
Explaining the shift, Akhil Chaturvedi, chief business officer at Motilal Oswal Asset Management, said markets are essentially a function of confidence and performance. “Over the last 12 months, many investors have not made money, with returns in several pockets turning negative. This has naturally led to a phase of time correction,” he noted.
Echoing similar views, Sandeep Bagla, chief executive officer of Trust Mutual Fund, said domestic equity MF flows have clearly moderated this year. “Mid- and small-cap segments have disappointed investors, reducing enthusiasm, especially among do-it-yourself investors. SIPs remain the only resilient source of flows, along with a few sporadic NFOs. Beyond that, incremental flows into equity schemes have been largely negligible,” he said.
Despite the slowdown in lump-sum and NFO investments, systematic investment plans continue to anchor the industry. SIP inflows have touched Rs 3.03 lakh crore in 2025, marking a strong year-on-year increase and accounting for a growing share of overall equity inflows. This underscores a behavioural shift among retail investors toward disciplined, long-term investing rather than tactical lump-sum bets.
