Image Source: ET Now
India’s mutual fund industry has achieved a historic milestone, reaching assets under management (AUM) of over ₹75 lakh crore as of August 2025, marking a phenomenal expansion from roughly ₹14 lakh crore just a decade ago. This remarkable growth was underscored by SEBI Chairman Tuhin Kanta Pandey during the AMFI Foundation Day event, reflecting the deepening roots mutual funds now have in India’s financial ecosystem and the opportunities that lie ahead.
Key Highlights of Industry Growth
-
The AUM of India’s mutual fund industry has more than quintupled in ten years, a clear signal of growing investor confidence and participation.
-
Despite this impressive feat, mutual fund assets currently represent about 22% of India’s GDP—significantly lower than in advanced economies—indicating substantial room for further expansion.
-
The count of unique mutual fund investors has surged from 1 crore a decade ago to nearly 5.6 crore today, emphasizing broader financial inclusion.
-
Systematic Investment Plans (SIPs) have become the cornerstone of disciplined investing, with monthly SIP inflows now exceeding ₹28,000 crore.
-
New fund offers continue to flourish, with 30 fresh fund schemes collectively raising over ₹30,000 crore in recent months.
Expanding Investor Base and Financial Inclusion
SEBI Chairman Pandey poignantly described the SIP as a seed planted in the soil of financial discipline, which, over time, grows into a strong tree providing shade, fruit, and security for investors. Millions of Indians contributing regularly through SIPs are collectively nurturing what he terms a “financial forest” — a robust and diversified financial future for the country.
This expansion is not restricted to metropolitan areas; increasing investor participation from Tier 3 (T30) and below Tier 30 (B30) regions speaks to enhanced penetration and inclusion. July 2025 saw the addition of 6.4 lakh new investors, pushing the total unique investors close to 5.6 crore. Notably, B30 cities showed steady growth in assets under management, underlining a widening investor base beyond traditional urban centers.
Product Trends and Market Dynamics
-
Equity mutual funds have experienced robust inflows, with month-on-month net investments jumping by 81% to over ₹42,700 crore.
-
Debt funds remain strong, attracting ₹1.07 lakh crore, with money market and liquid schemes leading investor preference.
-
Hybrid funds also continue to gain traction, benefiting from balanced risk and return profiles.
-
Multi-asset allocation funds and solution-oriented products are growing in popularity, providing investors with diversified portfolios spanning equity, debt, and hybrids, following the Indian flag metaphor of saffron (equity), white (debt), and green (hybrid).
Regulatory Initiatives and Investor Protection
The SEBI chief stressed that growth alone is not the industry's hallmark; trust and sound fund management form its very soul. To protect investor interests, SEBI has emphasized greater accountability among Asset Management Companies (AMCs), especially in managing third-party vendor risks and preventing data breaches.
Further, SEBI is actively promoting financial inclusion initiatives geared toward first-time investors in small towns and women investors through innovative products such as Chotti SIP (small-ticket SIPs) and Mutual Fund Lite, which simplifies access to passive funds like index funds and ETFs.
The regulatory focus is also on bridging gaps between mutual funds and portfolio management services with specialized investment funds, enabling a spectrum of investor needs to be met effectively.
Industry Metrics and Recent Performance
The number of mutual fund folios stands at approximately 24.57 crore as of August 2025, reflecting the proliferation of both new and existing investors.
Equity and hybrid funds continue to lead portfolio additions, with 31.35 lakh new equity folios added in July 2025 alone.
Despite rising folio counts, the average AUM per folio declined slightly, indicating smaller average ticket sizes—a sign of increasing participation from retail and first-time investors.
What’s Next for India’s Mutual Fund Industry?
The current size of ₹75 lakh crore AUM is a landmark that cements mutual funds as a vital component of India’s capital markets and retail wealth creation narrative. However, with a relatively modest penetration relative to GDP compared to global peers, immense growth potential remains. Expansion into untapped markets, innovative product offerings, and strengthened investor education are expected to drive the industry’s trajectory.
SEBI’s Chairman underscored that enhancing trust, ensuring transparency, and fostering disciplined long-term investing remain crucial for sustaining growth. The mutual fund ecosystem is evolving into a powerful platform democratizing access to wealth creation for millions of Indians across urban and rural landscapes.
Source: Business Today, ScanX Trade, AMFI, Moneycontrol, CNBC TV18, Angel One
Advertisement
Advertisement
