The Indian mutual fund industry’s assets under management (AUM) have now surpassed Rs 75 lakh crore. But amid this rapid growth in AUM, a crucial question that comes to mind is how investors are investing in mutual funds. Are they investing directly or still buying mutual funds through agents and distributors?
The latest Franklin Templeton report – Mutual Fund Industry Dashboard – September 2025, based on AMFI data, provides an answer to this question. According to the report, a large number of Indian investors still rely on the distributor channel when it comes to investing in equity funds, although the trend of direct investment is high in other categories.
70% of investments in equity funds come from the distributor channel
According to the report, based on data as of September 2025, 30% of equity assets are owned by direct plan investors.
(Source: Franklin Templeton/AMFI)
This clearly shows that, only in the case of equity investments, more investors prefer distributors or agents, as only 30% have been invested through direct plans. This is because investors rely on these channels for advice and guidance, especially when choosing funds or understanding risk.
Direct investment: Digital platforms have changed the picture
The Franklin Templeton report shows that the share of direct investment (direct plans) has increased rapidly in the past few years. The share of direct investment in the total industry was around 45% in 2024, which increased to 48% by September 2025.
Digital platforms have played a major role in this growth. Now, millions of young investors are investing by selecting funds themselves through apps like Groww, Zerodha, Paytm Money, Kuvera and several others.
With the help of these platforms, investors are able to directly invest at a lower expense ratio.
Where is direct investment most prevalent?
The impact of direct plans is most visible in debt and liquid mutual funds. About 83% of investments in liquid/money market funds come through direct channels, while 68% of investors invest directly in debt-oriented funds.
This is because most investors in these categories are institutional — such as corporates, banks, and large companies—who make their investments directly through AMCs.
Distributors still dominate equity funds
The distributor channel still has the highest share (70%) in equities. This is because most retail investors still rely on financial advisors or bank relationship managers. Agents help them select funds, understand risks, and create long-term SIP plans.
However, the report suggests that the distributor channel’s share may gradually decline in the coming years due to digital platforms and low-cost direct funds.
Individual vs. institutional investors: Who invests where
About 87% of individual investors invest in equity-oriented funds, while 53% of institutional investors invest in debt and liquid funds. This clearly shows that retail investors rely on equities for long-term growth, while institutions prefer debt and liquid funds for stable returns and lower risk.
Changing investment habits
Investment patterns in India are gradually changing. While investors previously relied on agents and banks, the new generation is now researching funds themselves through mobile apps and websites.
According to AMFI data, direct investment is no longer limited to urban investors; investors in tier-2 and tier-3 cities are also adopting online channels.
Summing up…
The face of mutual fund investment in India is changing. Currently, 70% of equity fund investments come through distributors, but the number of direct investors is rapidly increasing. Institutional investors are more active in debt and liquid funds, while retail investors still rely on equities.
In the future, with the pace of Digital India, the share of DIY (do it yourself) investors in the mutual fund industry is likely to increase further.