Passive fund AUM rose to Rs 14.77 lakh crore in May 2026, even as the industry saw net outflows. While equity passive funds attracted Rs 9,488 crore in inflows, debt and commodity funds recorded significant withdrawals during the month.
Assets under management (AUM) of passive funds rose to Rs 14.77 lakh crore in May 2026, even as the industry recorded net outflows of Rs 402 crore, according to the NSE Nifty Passive Insight report.
Equity Funds Remain Main Driver
The report said passive equity funds remained the main driver of the industry, attracting net inflows of Rs 9,488 crore during the month. Equity ETFs received Rs 6,692 crore, while equity index funds saw inflows of Rs 2,796 crore, highlighting continued investor preference for equity-based passive products. However, market volatility limited the impact of these inflows on overall assets. Equity ETF AUM declined to Rs 7.81 lakh crore in May from Rs 7.85 lakh crore in April, as market losses offset fresh investments.
Debt and Commodity Funds Face Outflows
Debt passive funds, on the other hand, saw net outflows of Rs 7,037 crore. Debt ETFs accounted for Rs 5,179 crore of the withdrawals, with their AUM falling to Rs 0.93 lakh crore from Rs 0.98 lakh crore in April.
Debt index funds also reported outflows of Rs 1,858 crore. Their AUM eased to Rs 0.95 lakh crore from Rs 0.96 lakh crore in the previous month.
According to the report, the recent outflows reflect short-term pressure. It added that tax relief for foreign portfolio investors (FPIs) investing in government securities is expected to improve post-tax returns and support future inflows. Commodity passive funds also witnessed outflows of Rs 2,858 crore. Silver ETFs saw withdrawals of Rs 2,133 crore, while gold ETFs recorded outflows of Rs 725 crore. Despite this, higher prices helped raise AUM to Rs 0.86 lakh crore for silver ETFs and Rs 1.85 lakh crore for gold ETFs.
Industry Growth and Investor Participation
Investor folios declined marginally to 5.47 crore in May from 5.48 crore in April. At the same time, the number of passive schemes increased to 701 from 690.
The industry launched 12 new passive schemes during the month, including six ETFs and six index funds. Of these, 10 were equity-based. The total number of passive schemes stood at 368 index funds and 333 ETFs.
The report said that despite asset-class-specific fluctuations in flows, stable AUM, new product launches and continued investor participation reflect the growing importance of passive investing in India's investment landscape. (ANI)
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