India’s mutual fund industry has witnessed a historic expansion, adding over ₹10 lakh crore in assets under management (AUM) since last Independence Day. This surge, driven by robust equity inflows, aggressive systematic investment plans (SIPs), and a wave of new fund offerings, underscores the growing confidence of domestic investors in capital markets.
Here’s a detailed look at the factors fueling this record-breaking growth and what it means for the future of retail investing.
Key Milestones and Market Indicators
- Total industry AUM rose from ₹64.69 lakh crore in August 2024 to ₹75.10 lakh crore in July 2025
- Equity schemes alone attracted ₹42,702 crore in July 2025, up 81% from June’s ₹23,587 crore
- Sectoral and thematic funds led the equity charge with ₹9,426 crore in inflows, a 1,882% jump month-on-month
- Debt funds rebounded with ₹1.06 lakh crore in net inflows, reversing two months of outflows
- Hybrid funds maintained steady traction, drawing ₹20,879 crore in July despite a slight dip from June
SIP Momentum and Retail Participation
Systematic investment plans have become the backbone of retail investing:
- Monthly SIP contributions have remained consistent, reflecting disciplined investor behavior
- SIPs in top-performing funds have delivered annualized returns of up to 21% over the past decade
- Flexi-cap and multi-cap funds have emerged as favorites, offering diversification and growth potential
- The rise in SIP volumes from Tier 2 and Tier 3 cities indicates deepening financial inclusion
New Fund Offers and Passive Investing Trends
The industry saw a flurry of new fund launches in July:
- Around 30 open-ended schemes mobilized ₹30,416 crore
- Debt-oriented NFOs led with ₹18,948 crore across five schemes
- Equity NFOs raised ₹8,997 crore, while passive products gathered ₹8,259 crore
- Gold ETFs, index funds, and overseas fund-of-funds also saw renewed interest
Passive investing continues to gain ground:
- Passive funds now account for over ₹10.85 lakh crore in AUM
- Investors are increasingly drawn to low-cost, broad-based exposure through ETFs and index funds
- Thematic passive funds focusing on electric vehicles, tourism, and capital markets are gaining traction
Fund House Performance and Market Leadership
SBI Mutual Fund remains the industry leader:
- SBI MF crossed ₹10.99 lakh crore in AUM, up from ₹9.88 lakh crore in June 2024
- ICICI MF and HDFC MF follow with ₹8.41 lakh crore and ₹7.47 lakh crore respectively
- The top 16 fund houses control 90% of the industry’s AUM, totaling ₹59.51 lakh crore
Investor sentiment remains buoyant despite market volatility:
- Domestic mutual funds have countered foreign portfolio outflows with record net investments
- Retail investors are increasingly viewing market corrections as buying opportunities
- Education and outreach by distributors have helped demystify mutual fund investing for first-time participants
Conclusion: AUM Surge Signals Structural Shift
The ₹10 lakh crore AUM surge in just one year marks a structural shift in India’s investment landscape. With equity schemes leading the charge and SIPs becoming a household habit, mutual funds are no longer niche financial instruments—they’re mainstream wealth-building tools. As fund houses innovate and investors diversify, the industry is poised for sustained growth, deeper penetration, and greater resilience.
Sources: Moneycontrol, MSN Money, CNBC TV18, LiveMint, Adda247
