#PassiveFunds #MutualFundsIndia #AMFI #EquityETFs #IndexFunds #GoldETFs #SilverETFs #TargetMaturityFunds #InvestmentTrends #AUMGrowth
Mumbai – India’s passive mutual fund industry continues to gather steam, crossing a fresh milestone in June 2025. According to data released by the Association of Mutual Funds in India (AMFI), the average assets under management (AUM) of passive funds surged to ₹12.41 lakh crore, marking a strong 21.41% year-on-year growth compared with ₹10.22 lakh crore in June 2024.
With this expansion, passive funds now constitute 16.59% of the total mutual fund industry AUM, which stood at ₹74.49 lakh crore in June 2025.
Equity ETFs Dominate Passive Landscape
Within the passive universe, equity exchange-traded funds (ETFs) continue to hold the lion’s share. Their average AUM stood at ₹7.13 lakh crore, accounting for 57% of the passive fund corpus and nearly 9.56% of the total mutual fund industry AUM.
Equity ETFs remain popular with institutional investors, particularly as vehicles for disinvestment programs and pension allocations. However, despite their scale, they recorded net outflows of ₹625 crore in June, reflecting tactical adjustments by investors.
Equity Index Funds: Rising Popularity
The second-largest passive category is equity index funds, with an average AUM of ₹1.86 lakh crore. These funds are increasingly popular with retail investors due to their simplicity and systematic investment options.
In June, equity index funds topped the inflow chart with ₹2,523 crore of net inflows, underlining the growing retail preference for low-cost passive investing. With 212 active schemes, they also represent the single largest category in terms of scheme count.
Target Maturity Index Funds See Pressure
The third major segment, target maturity index funds (TMFs), posted an AUM of ₹1.03 lakh crore. However, this category witnessed net outflows of ₹1,106 crore in June, amid volatile debt markets and shifting investor appetite.
Despite outflows, TMFs remain popular among investors seeking predictable maturity-based returns. With 96 schemes, they are the most widely spread product category in fixed-income passives.
Gold and Silver ETFs Shine
Precious metals-linked ETFs gained traction in June, with both gold and silver schemes recording strong inflows.
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Gold ETFs attracted net inflows of ₹2,081 crore, pushing their AUM to ₹64,833 crore.
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Silver ETFs followed closely, drawing ₹2,005 crore of net inflows, with their AUM reaching ₹19,135 crore.
These inflows indicate that investors continue to view precious metals as an effective hedge against inflation and global uncertainties.
International Exposure Still Small
While global diversification remains a theme, international passive funds continue to represent a small share of India’s passive AUM.
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International equity ETFs had an AUM of ₹14,411 crore, but saw net outflows of ₹36 crore in June.
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FoFs in overseas passive funds reported an AUM of ₹8,313 crore, also posting outflows of ₹63 crore.
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In contrast, FoFs investing in overseas active funds bucked the trend with modest inflows of ₹92 crore, raising their AUM to ₹19,671 crore.
The weakness in overseas passives reflects regulatory constraints on foreign exposure limits and currency-related risks.
Debt ETFs and Index Funds Under Pressure
The debt side of passives saw mixed fortunes in June. Debt ETFs recorded outflows of ₹499 crore, reducing their attractiveness in a volatile interest rate environment. Similarly, non-target maturity debt index funds saw net outflows of ₹313 crore.
Still, the overall debt passive corpus remains significant, with debt ETFs holding ₹97,736 crore in AUM, while debt index funds together managed ₹5,860 crore.
Inflows vs Outflows in June
The aggregate data show that passive funds saw net inflows of ₹3,997 crore in June. Inflows were largely driven by:
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Equity index funds (+₹2,523 crore)
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Gold ETFs (+₹2,081 crore)
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Silver ETFs (+₹2,005 crore)
On the other hand, major categories such as equity ETFs (-₹625 crore), target maturity index funds (-₹1,106 crore), and debt ETFs (-₹499 crore) experienced selling pressure.
Scheme Count Highlights Depth
The passive universe in India now comprises 642 schemes across multiple categories. The breakdown shows the breadth of investor options:
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Equity Index Funds: 212 schemes
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Equity ETFs: 191 schemes
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Target Maturity Index Funds: 96 schemes
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Debt ETFs: 34 schemes
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Gold ETFs: 20 schemes
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Silver ETFs: 15 schemes
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FoFs in overseas funds (active + passive): 52 schemes
The high number of schemes highlights the expanding investor appetite for differentiated passive offerings.
The Bigger Picture
India’s passive investing story has been on a structural growth trajectory, driven by three key factors:
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Cost Advantage: Passive funds generally carry lower expense ratios, appealing to cost-conscious investors.
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Simplicity: Index-linked investing is easier to understand, making it attractive for retail participation.
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Global Trend: The rise of passive funds in India mirrors global markets, where ETFs and index funds dominate.
As passive AUM rises to over 16% of the mutual fund industry, industry experts believe India is still in the early stages of its passive journey, with significant headroom for growth.
Conclusion
With assets of ₹12.41 lakh crore and double-digit annual growth, passive funds are steadily cementing their place in India’s investment landscape. Equity ETFs remain the backbone, but equity index funds and precious metals ETFs are witnessing growing traction.
Flows in June reflected a mix of tactical profit-taking and hedging strategies, but the broader trend underscores that passives are no longer peripheral—they are central to India’s mutual fund story.
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