Overall AUM Growth
The mutual fund industry in India exhibited strong expansion, reaching new heights during August 2025. According to a Franklin Templeton report, assets
under management (AUM) reached a record Rs 75.19 lakh crore, representing a substantial 12.7% rise from Rs 66.7 lakh crore the previous year. This impressive growth indicates a continuous upward trajectory for the industry. This shows a positive shift in investment behavior and market confidence.
Equity Scheme Dominance
Equity-oriented schemes continue to be the leading investment choice, attracting considerable investor interest. The report highlights that the AUM for these schemes stood at Rs 53.9 lakh crore, demonstrating a 10.3% year-on-year increase. This growth underlines investors' preference for equity-based investments, reflecting a positive outlook on the market and the economy. The consistent performance of these schemes has solidified their position as a crucial component of the investment landscape.
Debt Fund Momentum
Debt funds also displayed significant progress, gaining considerable momentum. The AUM for fixed-income investments experienced a jump of 19.4%, propelled by a favorable interest rate environment that drew investors seeking more stable and consistent returns. This surge indicates a balanced investment strategy, with investors diversifying their portfolios to incorporate the relative safety and steady yields offered by debt funds.
SIPs Drive Retail
Systematic Investment Plans (SIPs) remained a central force in driving retail investor participation. Monthly SIP inflows reached Rs 28,265 crore in August, a notable 20% increase compared to the previous year. While the total number of SIP accounts saw a slight dip of 0.2%, the average monthly ticket size rose to Rs 2,947. This upward trend suggests that investors are committed to their investment strategies. Over the past 12 months, SIP contributions saw a staggering 35% increase, soaring to Rs 3.17 lakh crore from Rs 2.34 lakh crore the year before.
Passive Investing Gains
Passive investing strategies continue to gain traction among investors. The AUM for passive funds reached Rs 12.19 lakh crore, accounting for 16% of total industry assets. This represents an 11.3% rise from the previous year's Rs 10.96 lakh crore. A substantial 73% of this passive fund pool consists of domestic equity passive funds. This shift towards low-cost index funds and ETFs highlights the growing appeal of passive investing strategies among investors.
Emerging Growth Hubs
Smaller cities are becoming increasingly important in the expansion of the mutual fund industry. Locations beyond the top 30 cities (B30) now account for 18% of the overall AUM, surpassing the contribution from the top 30 cities (T30). This trend indicates a wider distribution of investment activity across the country. Retail investors hold a commanding 87% share of equity AUM, underscoring their influence in the market. Domestic institutional investors (DIIs), including mutual funds, injected Rs 7.3 lakh crore over the previous 12 months, while foreign portfolio investors (FPIs) withdrew Rs 3.8 lakh crore during the same time.
