Record-Breaking AUM
The Indian mutual fund industry experienced substantial growth, with assets under management (AUM) reaching an all-time high of Rs 75.61 lakh crore by
September 2025. This accomplishment signifies a notable 12.7% year-on-year expansion. The latest Mutual Fund Industry Dashboard report, issued by Franklin Templeton, reveals that equity-oriented funds were a primary driver of this growth, increasing by 9.5%. Fixed income-oriented funds additionally experienced a substantial surge, growing by 22.2%. This positive trend underscores the increasing confidence of investors in the Indian financial market, leading to significant inflows and boosting overall market performance. These figures underscore the financial sector's strong position within the nation's economy.
SIPs and Investor Growth
Systematic Investment Plan (SIP) monthly flows also reached a record level, demonstrating the growing dedication of investors. These flows climbed by 20% compared to the previous year, reaching Rs 29,361 crore. The number of unique accounts also saw an increase, reaching 5.7 crore, up by 13.8% year-on-year. This expansion indicates a broadening investor base and enhanced market participation. Individual investors account for 61% of the overall AUM. This illustrates a trend towards retail investors actively participating in the market, further boosting the industry's growth trajectory and indicating a healthy investment climate. These indicators reflect the rising confidence in the Indian mutual fund market.
Direct Plan Popularity
The preference for direct plans among investors has also been rising. Direct plans now constitute 48% of the total AUM, suggesting that investors are increasingly confident in managing their investments independently. Equity funds continue to dominate the market, holding approximately 61% of the total AUM. This is an indication of investors' inclination toward growth-oriented equity schemes. Meanwhile, passive funds, including index funds and ETFs, account for 17% of the market, reflecting a growing appreciation for diversified investment options. This shift towards direct plans indicates a more informed and engaged investor base, shaping the evolution of the market dynamics.
Diversification Trends
The market witnessed net outflows from debt funds in September, partially attributable to portfolio adjustments at quarter-end. However, hybrid funds, arbitrage funds, gold ETFs, and overseas fund-of-funds continued to attract substantial inflows. This movement demonstrates a clear trend toward portfolio diversification among investors. Geographically, top metropolitan cities like Mumbai, Delhi, and Bengaluru remain dominant contributors to AUM. Yet, emerging cities such as Ahmedabad, Jaipur, and Bhopal are rapidly gaining prominence. The increasing participation from these new areas suggests a wider and more inclusive market landscape, reinforcing the positive growth trajectory of the industry.
Global and Future Outlook
Globally, mutual fund assets reached $80.85 trillion by Q2 2025, reflecting a 15% year-on-year increase. The Americas hold 56% of these global assets. In the US, mutual fund assets have more than doubled over the last decade, growing at a 9% compound annual growth rate (CAGR). Positive net flows in August 2025 were mainly driven by money market and bond funds, despite outflows from equity and hybrid funds. The Indian mutual fund industry's record-breaking performance and the global trends suggest a positive and promising outlook. Continuous innovation, strategic investment approaches, and expanding investor participation are key to sustaining this momentum, further solidifying the sector's position as a critical component of India’s economic growth.
