Inflows In Overseas Mutual Funds Triple in February 2025 As India’s Stock Market Continues To Underperform Global Peers

Amid a drawdown in India's stock market over the past five and a half months, investors are showing an increasing interest in overseas funds. The net asset under management (AUM) in these schemes has been increasing over the past five months, from the time India's stock market started its downward trend.

From a net AUM of Rs 25,866.41 crore, as of September 31, 2024, it grew to Rs 27,587.14 crore by February 28, 2025, Association of Mutual Funds In India’s (Amfi) latest monthly report showed. This represents a growth of 6.65 per cent over the five month period.

Sensex and Nifty 50, during the period, have corrected a little over 14 per cent and 17 per cent, respectively, significantly underperforming global peers.

Meanwhile, Hong Kong's Hang Seng, where many of the Chinese's stocks are listed, grew over 11 per cent. Germany's DAX, during the same period, rose more than 16.5 per cent. Russia's MOEX also rallied over 16 per cent during the five-month period. South Korea's KOSPI has remained nearly flat, the US's Dow Jones had declined a modest 2.3 per cent.

Inflows In Overseas Funds Triple In February

Inflows in the 54 overseas funds across the domestic mutual funds industry more than tripled in February 2025 to Rs 246 crore from Rs 77.53 crore a month ago, rising 217 per cent in the said period. 

Before this, these funds had seen outflows of Rs 83.45 crore in December 2024 and Rs 69.48 crore in November 2024. In October 2024, however, when China's market was booming, these funds attracted a net inflow of Rs 93.91 crore.

Net Inflows Into Equity Funds Falls For Second Consecutive Month

In February 2025, the net inflows into equity-focussed mutual funds fell to Rs 29,303.34 crore from Rs 39,687 crore in January. This is the second consecutive month of declining inflows into equity mutual funds.

Inflows into midcap, smallcap, and largecap funds all saw month-on-month declines in February. Midcap funds saw inflows of Rs 3,406 crore, down from Rs 5,147 crore in January. Smallcap funds saw inflows of Rs 3,722 crore, down from Rs 5,720 crore, while largecap funds saw Rs 2,866 crore in inflows, compared to Rs 3,063 crore the month before.

SIP Stoppage Rate Shoots Up 122 Per Cent

The monthly systematic investment plan (SIP) inflows into mutual funds declined to Rs 25,999 crore in February from Rs 26,400 crore in January. SIP AUM also declined to Rs 12,37,784 crore from Rs 13,19,853 crore over the same period.

The number of new SIP accounts that were opened during this month also declined to 44.56 lakh compared to 56.19 lakh in January. The number of accounts that have been discontinued also decreased to 54.7 lakh in February from 61.33 lakh in January.

The SIP stoppage rate, as a result, shot up to 122.76 per cent from January 109 per cent. This rate in December stood at 82.73 per cent. The SIP stoppage rate is a percentage that measures the number of discontinued or expired SIPs against the number of new SIP registrations in a month.

The number of total SIP accounts stood at 10.16 crore as of February, decreasing from 10.26 crore in January.