The equity mutual fund sector witnessed a significant decline in assets under management (AUM) in January, as a broad fall in the domestic stock market led to mark-to-market losses. The net AUM of equity mutual funds plummeted by Rs 1.1 lakh crore, or 3.26 per cent, on a month-on-month basis, to Rs 29.46 lakh crore as of end-January 2025, highlighting the vulnerability of mutual fund investments to market volatility.

With small-cap stocks coming under pressure, net AUM of small-cap funds fell by Rs 23,665 crore, or 7.19 per cent, to Rs 3.05 lakh crore as on January 31, 2025, compared to Rs 3.29 lakh crore on December 31, 2024. Mid-cap funds also witnessed their assets shrinking by Rs 26,600 crore, or 6.65 per cent, to Rs 3.73 lakh crore as of January 31, 2025, compared to Rs 3.99 lakh crore as at December 31, 2024, according to latest data from the Association of Mutual Funds in India (AMFI).

In January, while BSE and NSE tanked 1.28 per cent and 0.98 per cent, respectively, broader indices such as BSE Small-cap, BSE Mid-cap and Nifty NEXT 50 saw a sharp fall of 10.38 per cent, 7.66 per cent and 7.5 per cent, respectively as global trade war intensified after US President Donald Trump moved ahead with his tariff plan and foreign investors continued with their sell-off.

The net inflows into equity mutual funds, though remained positive, also fell by 3.56 per cent to Rs 39,687.78 in January 2025, compared to Rs 41,155.91 crore in December 2024, the latest data from the Association of Mutual Funds in India (AMFI) showed.

AMFI said inflows through systematic investment plan (SIP) marginally declined to Rs 26,400 crore compared to Rs 26,459 crore in the previous month. The number of SIPs also declined in the month.