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Equity MF inflows (including hybrid, ex-arbitrage) stood at INR 424bn in Aug’25, -25% MoM, -8% YoY. Arbitrage inflows were strong at INR 67bn, down slightly from INR 73bn in June. Equity (+ hybrid) NFO inflows were INR 22bn, down from an exceptionally strong INR 109bn in July - key funds for the month being Kotak Active Momentum Fund, Bank of India Mid Cap Fund, Bajaj Finserv Equity Savings Fund and 360 ONE Multi Asset Allocation Fund. SIP inflows were steady at INR 282.7bn, -0.7% MoM, +20% YoY.

Of the INR 142bn decline in net inflows MoM, 61% (INR 87bn) was due to a weaker NFO pipeline.

NFO momentum was even weaker in August, key schemes being Baroda BNP Business Conglomerates Fund and Groww Multi Asset Allocation Fund. Gross sales moderated from INR 977bn in July to INR 773bn in August – still strong and the second highest number in FY26 so far. Redemptions reduced to just INR 350bn, the lowest in FY26.

Coming to segmental inflows, the biggest MoM decline in inflows was seen in thematic funds (down from INR 94bn to INR 39bn), with the strong NFO activity in July. Small-cap inflows saw a MoM decline of INR 15bn - of which INR 11bn was due to an NFO (Bajaj Finserv) in July.

Equity AUM (including arb) was flattish MoM at INR 43.8trln (against INR 43.9trln in July and INR 44.0trln in June) with a negative 1.5% appreciation and a 1.1% gain from inflows.

Debt MFs saw outflows of INR 18bn vs. inflows of INR 139bn MoM while Liquid schemes saw outflows of INR 62bn vs. an inflow of INR 928bn in July. Within the broader Asset and Wealth Management space, we prefer wealth managers over the asset managers. Our top pick in the space is 360 ONE WAM. Amongst AMCs, we prefer NAM, which has shown consistent market share gains in equity AUM over the last couple of years and trades at comfortable valuations of 28x FY27e EPS

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