Passive Funds in July 2026: AUM Up 25%, But Fresh Inflows Slowed

Written by Finnovate

Content Team

India’s passive mutual fund market continued to expand in July 2026, even as fresh monthly inflows slowed.

Passive fund assets reached about ₹15.61 lakh crore, up 25.1% year-on-year, while folios rose 31.2% to 5.74 crore. Yet July net inflows were only ₹12,517 crore, around 25% below June.

All 13 passive fund categories in July 2026

The complete category-level picture is important because the headline ₹12,517 crore inflow hides very different trends underneath.

Source: AMFI, July 2026. Net AUM in ₹ crore; folios are account counts.

Equity passive products did most of the heavy lifting

The clearest July trend was continued demand for domestic equity passive products.

Together, these two categories contributed roughly 74% of all passive inflows during July.

Domestic equity ETFs were also the largest passive category by AUM at about ₹8.04 lakh crore, while domestic equity index funds held another ₹2.39 lakh crore.

International equity index funds were much smaller at ₹7,913 crore of AUM and saw only ₹1.87 crore of fresh inflows. International equity ETFs had ₹20,032 crore of AUM but recorded no net flow during July.

Other index funds were also relatively small, with ₹3,820 crore of AUM and a marginal ₹2 crore outflow.

Gold and silver remained much bigger than a year ago, but July flows cooled

Precious metals continued to show the most dramatic year-on-year growth.

Silver’s 429% folio growth is striking, while gold ETF AUM had climbed above ₹1.73 lakh crore.

But fresh inflows into both categories fell sharply from June. So July's message is not that investors abandoned precious metals. It is that the investor base remains much larger than a year ago while new buying became less aggressive.

Debt passive funds sent mixed signals

The debt categories are a good example of why passive funds cannot be treated as one uniform market.

Debt-oriented ETFs received ₹1,389 crore of inflows, despite their folio count being down 32.7% year-on-year and AUM down 1.1%.

At the same time, Target Maturity Index Funds recorded ₹959 crore of outflows. Their folios were down 2.7% and AUM was down 15.3% year-on-year.

Ex-TMIF debt index funds showed the opposite pattern: folios rose more than 211% year-on-year, but AUM was slightly lower and July inflows were only ₹26 crore.

International FoFs and smaller passive categories were subdued

Overseas Fund of Funds also produced mixed signals.

FoFs investing in overseas active funds had 86.5% year-on-year folio growth and 70.3% AUM growth, yet recorded a ₹42.6 crore outflow in July.

FoFs investing in overseas passive funds recorded a larger ₹47.7 crore outflow. Their folios were down 11.5% year-on-year even though AUM was up 13.7%.

This is another reminder that monthly flows, folio growth and AUM can move in different directions.

International mutual fund investing also remains affected by the overseas-investment limits available to the Indian mutual fund industry, which can restrict fresh deployment in some schemes.

Finally, the “Other Domestic ETFs” category was tiny at just ₹14.37 crore of AUM, despite recording ₹14.34 crore of July inflows. It is statistically part of the total, but not yet meaningful enough to influence the broader passive-fund trend.

How should investors read AUM, folios and monthly flows?

This is why the data cannot establish, for example, that retail investors are leaving gold while HNIs are entering. Investor-category data would be needed to support that conclusion.

What should investors take away from July?

July's ₹12,517 crore passive inflow was weaker than June, but the broader trend remains strong.

Passive folios were up 31.2% year-on-year. AUM was up 25.1%. Domestic equity index funds and ETFs continued to dominate new money. Precious-metal products retained a much larger investor base than a year ago, even as monthly buying cooled. Debt and overseas categories were far more mixed.

For an investor, that makes one distinction especially important.

“Passive” describes how a fund is managed. It does not tell you what risk you are taking.

A Nifty 50 index fund, gold ETF, silver ETF, debt ETF and international index fund can all be passive products, but they perform very different jobs inside a portfolio.

So the useful question is not which category has the fastest-growing AUM or folios. It is whether that asset class and exposure fit the investor’s overall asset allocation.

FAQs

1. How large were passive funds in India in July 2026?

The passive categories covered by AMFI had about ₹15.61 lakh crore of AUM and 5.74 crore folios.

2. Are passive fund inflows slowing?

July net inflows were around 25% below June, but year-on-year AUM and folio growth remained strong. One weaker month does not indicate a structural reversal.

3. Which passive category received the highest July inflows?

Domestic equity-oriented ETFs led with about ₹6,824 crore, followed by domestic equity index funds with ₹2,469 crore.

4. Why can AUM rise even if fresh inflows fall?

AUM changes with both investor flows and movements in the market value of the underlying assets.

5. Which categories saw outflows in July?

TMIF debt index funds, other index funds, FoFs on overseas active funds and FoFs on overseas passive funds recorded net outflows.

Disclaimer: Mutual fund investments are subject to market risks. Passive funds can experience market, tracking, liquidity and concentration risks depending on the underlying index or asset class. Investors should evaluate suitability and asset allocation before investing.