Children’s Mutual Funds AUM Jumps 160%; Check Top 5 Performers In 2025 | Savings and Investments News

Last Updated:December 15, 2025, 15:32 IST

Children’s Mutual Funds AUM rose 160 percent in five years to Rs 25675 crore in Nov 2025, with top funds like SBI Magnum and ICICI Prudential delivering up to 34 percent CAGR.

Children’s Mutual Funds see 160% AUM surge as top 5 schemes deliver strong returns in 2025

Top 5 Children Mutual Funds: The Assets under Management (AUM) of Children’s Mutual Funds has increased by 160 per cent in the last five years to touch Rs 25,675 crore in November 2025, up from Rs 9,866 crore in November 2020. The number of folios is close to 32 lakhs in Nov-2025 as against ~29 lakhs in Nov-2020, which clearly signals a growing interest and appetite for such funds, ICRA Analytics said.

Children’s mutual fund, which has clocked an impressive CAGR growth of around 21.08 per cent over the last five years, is expected to register a double-digit growth in the coming years. Rising cost of education, which has been increasing by 11–12 percent annually, and the superior returns generated by these funds are driving parents toward market-linked instruments for long-term planning.

There are close to 12 such funds currently available in the market and some of the top-performing funds have delivered average CAGR of 15-20 percent in the last three-to-five years. This has made these funds a favored choice among parents for securing children’s education and future milestones, reflecting a clear shift from conventional savings to market-linked instruments.

“The Children’s Mutual Fund sub-category in India has witnessed strong growth in recent years, driven by rising education costs and the need for disciplined, goal-based investing. Parents increasingly prefer these funds because they combine equity and debt exposure, offer superior returns compared to traditional options like fixed deposits, and enforce a lock-in period of five years or until the child turns 18, promoting long-term savings. Top returns from the popular schemes Fund have delivered impressive returns, with some plans achieving over 30 percent CAGR in five years,” Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, said.

The average compound annualized returns (as of Nov 2025) on these funds stood at has been close to 4%, 14% and 17% for a 1-year, 3-years and 5-years period respectively.

“The growth outlook for the Children’s Mutual Fund category in India is highly promising, supported by strong historical performance and evolving investor preferences. Over the past five years, the category’s AUM has surged by 160%, reaching ₹25,675 crore, and this momentum is expected to continue. Rising education costs, which are increasing at 11–12 percent annually, are driving parents toward market-linked instruments for long-term planning,” Kumar said.

“Investors are expecting the mutual fund industry to grow at a 10–18 per cent CAGR through 2033, and children’s funds, as part of this ecosystem, are likely to see double-digit annual growth. Overall, this category is poised to become a mainstream choice for goal-based investing, offering disciplined savings, tax benefits, and superior returns compared to traditional options,” he added.

Greater financial awareness, digital penetration, and regulatory support for solution-oriented schemes will further strengthen adoption.

source: ICRA Analytics

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