Individual Investors Fuel India’s Mutual Fund Boom, Outpacing Industry Growth
Mumbai, India – Individual investors are rapidly becoming the driving force behind India’s mutual fund industry, with their assets under management (AUM) expanding an impressive eightfold over the past decade. This surge significantly outpaces the industry’s overall sixfold growth during the same period, according to a recent report by Franklin Templeton India Mutual Fund.
As of June 2025, individual investors now command over 61% of the total mutual fund AUM. This substantial share is split between retail investors, who contribute 27.01%, and high-net-worth individuals (HNIs), who make up 33.67%. In contrast, corporates hold about 37.14% of the total AUM, while banks and financial institutions (2.13%) and foreign investors (a mere 0.05%) lag significantly behind.
A Decade of Outperformance
The numbers speak for themselves: over the last 10 years ending June 2025, the industry’s AUM grew at a compound annual growth rate (CAGR) of 20%. However, individual investors’ AUM soared at an even higher 23% CAGR during this period. The last five years saw industry AUM grow by 24% CAGR, while individual investor AUM continued its strong ascent, rising 23% annually.
Equity Remains the Top Choice
Individual investors overwhelmingly favor equity-oriented schemes, with nearly 87% of their assets invested in this category. Debt-oriented schemes account for 8%, followed by ETFs and fund-of-funds (3%), and liquid or money market instruments (2%).
Institutional investors, however, spread their investments differently: 28% in liquid funds, 25% in debt, 28% in ETFs/FoFs, and only 19% in equity-oriented schemes. Overall, equity funds remain dominant, forming around 55% of the total industry AUM.
SIPs Nearing ₹3,000 Mark
Systematic Investment Plans (SIPs) continue to be a popular avenue for individual investors. The average SIP ticket size climbed to ₹2,966 in June 2025, nearing the ₹3,000 mark and surpassing the pre-pandemic level of ₹2,861 recorded in December 2019. Total SIP contributions hit a record ₹27,269 crore in June 2025, and SIP AUM crossed ₹15 lakh crore, representing 20.6% of the industry’s total AUM.
Domestic Investors Lead the Charge
Domestic institutional investors (DIIs) are steering the market, bringing in net inflows of ₹6.5 lakh crore over the past 12 months, while foreign investors experienced net outflows of ₹3 lakh crore. This domestic impetus has propelled India’s mutual fund AUM to an all-time high of ₹74.41 lakh crore in June 2025.
Passive and Thematic Funds on the Rise
The growth of passive funds has been remarkable, with folios growing nearly 17 times in just five years. Passive fund AUM reached an all-time high of ₹12.33 lakh crore in June 2025, marking a 21% year-on-year growth. Their share of total AUM has increased from approximately 10% in 2021 to 17% in June 2025.
Additionally, sectoral and thematic funds continue to attract significant investor interest. These categories recorded the highest gross and net sales among equity segments in the last year, with net sales crossing ₹1.04 lakh crore over the past 12 months.
This robust growth indicates a growing financial awareness and active participation from individual investors, reshaping the landscape of India’s mutual fund industry.