Market's Remarkable Ascent
In September 2025, the Indian mutual fund industry celebrated a historic moment as its assets under management (AUM) reached a record Rs 75.61 lakh crore.
This achievement reflected a substantial year-on-year growth of 12.7 percent, according to data from Franklin Templeton's Mutual Fund Industry Dashboard. The rise was primarily driven by equity-oriented funds, which saw a 9.5 percent increase in AUM, while fixed-income funds experienced an even more impressive surge of 22.2 percent. These figures demonstrate a robust market, fueled by both equity and fixed-income investments, painting a picture of a diversified and thriving financial landscape. This upward trajectory highlights the growing confidence of Indian investors and the increasing appeal of mutual funds as a preferred investment avenue.
SIPs and Investor Growth
Alongside the overall AUM surge, Systematic Investment Plan (SIP) monthly flows also reached an all-time high. Monthly SIP contributions climbed to Rs 29,361 crore, reflecting a 20 percent increase from the previous year. This signifies a sustained commitment from investors and underscores the popularity of SIPs as a disciplined investment strategy. Simultaneously, the number of unique accounts increased to 5.7 crore, marking a 13.8 percent rise year-on-year. This growth in investor participation highlights the expanding reach of mutual funds and their appeal to a broader segment of the population. The increasing SIP contributions and the growing number of unique accounts signal a positive trend, suggesting a more widespread adoption of mutual fund investments among Indian investors.
Shifting Investment Trends
The data revealed significant shifts in investor behavior. Direct plans now account for 48 percent of the total AUM, suggesting a rising preference among investors to invest directly without intermediaries. Equity funds maintained their dominance, holding approximately 61 percent of the total AUM, indicating a strong appetite for equity investments. Moreover, passive funds, including index funds and ETFs, have gained popularity, now representing 17 percent of the market. This reflects a growing interest in diversified investment options. Individual investors accounted for 61 percent of the overall AUM, with a preference for growth-oriented equity schemes, while institutional investors held the remaining 39 percent. These trends showcase the evolving landscape of investor preferences, with a blend of direct investment, equity dominance, and the increasing adoption of passive funds.
Fund Flow Dynamics
While equity and fixed-income funds experienced substantial growth, the report also detailed specific fund flow dynamics. Sectoral thematic, multi-cap, and mid-cap equity funds witnessed the highest gross and net sales over the preceding 12 months. In contrast, debt funds faced net outflows in September, which was partially attributed to portfolio adjustments at the quarter's end. Hybrid funds, arbitrage funds, gold ETFs, and overseas fund-of-funds continued to attract considerable inflows, suggesting an ongoing diversification trend among investors. These flow patterns reveal the dynamic nature of fund movements and investment strategies, with investors actively adjusting their portfolios in response to market conditions and investment objectives.
Geographic and Global Context
Geographically, major metropolitan areas like Mumbai, Delhi, and Bengaluru continued to be key contributors to the AUM, with emerging cities such as Ahmedabad, Jaipur, and Bhopal rapidly gaining prominence. This expansion indicates the growing reach of mutual funds across different regions of India. The share of assets managed by AMCs outside the top 15 players also increased, suggesting a more competitive and broad-based industry. Globally, mutual fund assets reached $80.85 trillion by Q2 2025, a 15 percent year-on-year increase. The Americas accounted for 56 percent of global assets. Mutual fund assets in the US had more than doubled over the past decade, growing at a 9 percent CAGR. Positive net flows in August 2025 were mainly driven by money market and bond funds, despite equity and hybrid funds seeing outflows. These figures provide a holistic understanding of the Indian mutual fund industry within its broader geographical and global context.
