Mutual funds have become the preferred investment choice for Indian retail investors in recent years, as they have been actively shifting their savings from traditional bank deposits to equities, aiming to participate in India’s growth story, with majority opting for the mutual fund route to gain ownership in listed companies.
The robust inflows have not only broadened the investor base but also provided a strong foundation for the market, encouraging many companies to raise funds through the stock market to capitalize on ongoing domestic demand. This has also expanded the overall size of the Indian stock market, placing it in the fourth position globally.
At times, the steady inflows have even forced fund managers to pause or slow down SIP investments, as they found themselves running out of viable allocation opportunities.
Over the last year (July 2024 to July 2025), the size of the mutual fund industry has grown by ₹10.39 lakh crore, moving from ₹64.96 lakh crore to cross the ₹75 lakh crore mark for the first time in the previous month, reaching ₹75.35 lakh crore, as per the AMFI.
A significant portion of these inflows comes from millennials, who are embracing stock market investments much faster than previous generations. While some prefer direct investments through demat accounts, many still favor the steady approach of systematic investment plans (SIPs) to achieve their long-term financial goals.
These unprecedented inflows have also allowed domestic fund managers to offset the large impact on the markets when overseas investors sold their holdings massively.
The robust AUM expansion was primarily driven by steady inflows into equity schemes, which stood at ₹29.33 lakh crore in July 2024 and have now grown to ₹33.3 lakh crore.
Among the 11 equity mutual fund categories, sectoral and thematic mutual funds continued to draw significant retail investor interest, with their AUM rising 21% to reach ₹5.09 lakh crore, compared to ₹4.21 lakh crore in July 2024, AMFI data showed.
Apart from equity funds, debt funds have also been receiving significant interest. In July 2025, these funds recorded a strong net inflow of ₹1.06 lakh crore, as investors diversified away from bank fixed deposits, which have turned less attractive following multiple RBI rate cuts.
₹48.24 lakh crore AUM jump in just 5 years
Amid strong inflows into both equity and debt, the total assets under management (AUM) of the mutual fund industry stood at ₹75.35 lakh crore in July 2025.
Just half a decade ago, the mutual fund industry’s AUM stood at ₹27.11 lakh crore, indicating an addition of ₹48.24 lakh crore in only five years, AMFI data showed. Looking further back, the AUM of the Indian mutual fund industry has increased more than sixfold in the past 10 years.
The industry first crossed the milestone of ₹10 lakh crore in May 2014, and in just about three years, the AUM more than doubled to ₹20 lakh crore by August 2017. The AUM crossed ₹30 lakh crore in November 2020 and has since tripled.
Meanwhile, equity mutual fund AUM has surged from ₹7.37 lakh crore to ₹33.27 lakh crore in the last five years—a remarkable growth of 351%—and now accounts for 46% of the overall mutual fund industry’s AUM.
For the month of July 2025, a total of 44 lakh new folios were added, taking the total folio count to 24.57 crore. This is on top of the 50 lakh folios already added in May and June 2025.
In short, since the cleanup of defunct SIP folios was completed in April 2025, Indian mutual funds have already added 94 lakh folios, indicating robust retail demand.
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