Investors continued to pull back from equity mutual funds in October, with fresh inflows declining significantly for the second consecutive month, according to latest data from the Association of Mutual Funds in India (AMFI).
Sharp Decline in Equity Fund Investments
The latest AMFI data reveals that inflows into equity mutual funds dropped by 18.8% to ₹24,690 crore in October, compared to ₹30,421 crore recorded in September. This represents a substantial decline of nearly one-fifth in monthly investment flows into equity-oriented schemes.
The October figures continue a worrying trend for the mutual fund industry, as this marks the second straight month of declining inflows. The data shows a consistent pattern of investors becoming more cautious about pouring money into equity markets through mutual fund routes.
Continuing Downward Trend
The current decline follows a similar pattern observed in previous months. In September, equity mutual fund inflows had already dropped by 9% to ₹30,421 crore from the previous month's figures. The trend was even more pronounced in August, when inflows into equity funds had dropped by 22% month-on-month.
This three-month pattern indicates a sustained cooling-off period in equity mutual fund investments, potentially reflecting investor concerns about market valuations, global economic uncertainties, or domestic economic factors affecting investment decisions.
Market Implications and Investor Sentiment
The consistent decline in equity mutual fund inflows suggests changing investor behavior and potentially growing risk aversion among retail investors. The data, released on November 11, 2025, provides crucial insights into how Indian investors are responding to current market conditions and economic indicators.
Financial experts are closely monitoring this trend as it could signal broader changes in market sentiment. The reduction in systematic investment plan (SIP) flows or lump-sum investments into equity funds might indicate that investors are either waiting for better entry points or shifting towards other asset classes.
The AMFI data serves as an important barometer for measuring retail investor confidence in equity markets, and the consecutive monthly declines warrant attention from both fund managers and market analysts.
