Debt mutual funds see sharp recovery with ₹1.07 lakh crore inflows in July

Open-ended debt mutual funds recorded net inflows of ₹1.07 lakh crore in July 2025, reversing the ₹1,711 crore outflow seen in June, according to Association of Mutual Funds in India (AMFI) data.

The rebound was driven by institutional-heavy categories. Money Market Funds attracted ₹44,573 crore — their strongest monthly tally in recent times — taking quarterly inflows to nearly ₹97,000 crore. Liquid Funds saw ₹39,354 crore in net inflows, while overnight funds garnered ₹8,866 crore after two months of redemptions.

New fund launches contributed meaningfully to the inflows. JioBlackRock Liquid Fund mobilised ₹8,917 crore and JioBlackRock Money Market Fund collected ₹6,285 crore in July.

Other segments also reported gains. Low Duration Funds drew ₹9,766 crore, Ultra Short Duration Funds ₹2,277 crore, Corporate Bond Funds ₹1,421 crore, and Gilt Funds ₹1,050 crore.

Outflows were seen in select categories. Banking & PSU Funds recorded redemptions of ₹662 crore, Credit Risk Funds saw ₹221 crore in outflows, and Long Duration Funds lost ₹416 crore.

According to Nehal Meshram, Senior Analyst – Manager Research, Morningstar Investment Research India, July marked one of the strongest months for fixed-income flows in FY 2025 so far, taking year-to-date net inflows beyond ₹2.28 lakh crore. The breadth of inflows across money market, liquid, and corporate bond segments indicated sustained investor demand for yield-carry opportunities, while appetite for duration-heavy strategies remained selective.

Anand Vardarajan, Chief Business Officer at Tata Asset Management, added, “The industry crossed ₹75 lakh crore in assets under management (AUM) for the first time, a significant milestone reflecting growing financial savings. Most equity categories have seen strong flows, with flexi-cap funds leading the charge by recording the highest net inflows in equity and dominating net flows for the year.”

He further noted the evolving fixed income landscape: “Fixed income is changing colour, with liquid funds facing strong competition from money market funds. The money market category alone has crossed ₹3.37 lakh crore in AUM and garnered nearly ₹42,000 crore in net flows, accounting for about one-third of all fixed income inflows in the financial year to date.”

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