In the past 10 years, India's mutual fund industry has experienced exceptional growth, expanding more than six times. From an asset base of Rs 10.51 lakh crore in December 2014, the industry's assets under management (AUM) surged to an impressive Rs 66.93 lakh crore by December 2024. This remarkable growth is a testament to the increasing interest in mutual funds as a preferred investment vehicle among Indian investors.
Surge in Passive and Active Fund Growth
As of December 2024, passive funds saw a notable rise in popularity, with an AUM of Rs 10.85 lakh crore, capturing 16% of the market share. In comparison, active funds continued to dominate with an AUM of Rs 56.08 lakh crore. This shift signifies a growing trend towards cost-effective investment options like passive funds, while traditional active funds still hold significant appeal due to their potential for higher returns.
Equity Funds Lead the Charge
Equities have been the driving force behind the growth of mutual funds in India, accounting for a substantial 60.19% of the total AUM. Investors are increasingly turning to equity funds for long-term growth, particularly in sectors showing strong performance. The debt segment follows with 26.77% of the market share, offering more stable returns, while hybrid and other funds make up smaller portions of the industry.
Strong Inflows and Launch of New Schemes
In Q3 of FY25, the mutual fund industry saw net inflows of Rs 1.98 lakh crore, with equity funds, especially in the active segment, attracting the largest share. During this period, 84 new schemes were launched, bringing in Rs 24,800 crore in fresh investments. Among equity funds, broad-based funds gained significant traction, receiving over 69% of the net inflows. Debt funds also witnessed strong inflows, particularly in Liquid funds, while Multi-Asset and Balanced Advantage funds showed promising growth as well.
With innovation and technology playing key roles in shaping the industry’s future, India's mutual fund sector is poised for continued success, providing diverse investment opportunities for individuals across the country.