Mutual fund launches in 2025 revealed a clear mismatch between the number of new schemes introduced and the segments that actually attracted investor money.
Between January and November, asset management companies rolled out 204 new schemes, raising a total of ₹83,064 crore through new fund offers (NFOs). While passive funds dominated the launch pipeline, accounting for nearly 60% of all NFOs, they attracted only a small fraction of overall inflows.
A total of 121 passive schemes were launched during the period, but these collected just ₹6,371 crore, contributing less than 8% of total NFO mobilisation.
Index Funds Drive Limited Passive NFO Inflows
Within the passive category, index funds accounted for most of the money raised, despite being fewer in number than exchange-traded funds (ETFs).
During the year, 72 index fund NFOs mobilised around ₹6,424 crore. March emerged as the strongest month, when 11 index fund launches raised ₹2,049 crore, forming the bulk of passive NFO inflows for 2025.
ETF Launches See Muted Response
ETFs led the passive segment in terms of launch count but struggled to attract funds at the NFO stage. Around 63 ETF launches together raised only about ₹580 crore during the year. Monthly collections remained modest, particularly in the second half of 2025.
In October, for instance, eight ETF launches gathered just ₹59 crore, underscoring limited investor appetite for new ETF offerings.
Gold ETFs also saw minimal interest at the launch stage, with sporadic NFOs raising less than ₹100 crore in total, even during periods of heightened market volatility.
Active Funds Capture Bulk of Investor Money
In contrast, active mutual fund schemes attracted the majority of investor inflows. While only 83 active schemes were launched—accounting for just over 40% of total NFOs—they mobilised more than ₹76,693 crore, or over 92% of total NFO collections.
Debt funds led the active category, raising ₹41,305 crore through 17 schemes, supported by large institutional and corporate participation, particularly in June and July. Equity schemes collected ₹27,120 crore, with flows improving during periods of positive market sentiment. Hybrid schemes added ₹6,584 crore, delivering steady but moderate inflows throughout the year.
Strong Flows into Existing Passive Funds
Despite the weak response to passive NFOs, existing passive schemes continued to attract strong inflows. Between January and November 2025, cumulative investments into passive funds stood at around ₹1.35 lakh crore.
Index funds alone drew nearly ₹25,700 crore, while non-gold ETFs accounted for about ₹75,800 crore, supported by sharp inflows in March and April. Gold ETFs attracted around ₹31,300 crore, with inflows accelerating in September and October amid rising market uncertainty.
Market participants note that investors tend to favour established index funds and ETFs with proven performance, liquidity, and scale—especially institutional and pension investors. At the NFO stage, however, investor preference often shifts toward schemes with clearer return potential or familiar strategies, making it harder for new passive offerings to gain traction.
Disclaimer:
This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any mutual fund scheme. Mutual fund investments are subject to market risks. Readers are advised to consult certified financial advisors before making any investment decisions.
