Equity mutual fund AUM jumps 335% in 5 years to ₹33 lakh crore: ICRA Analytics

Equity mutual funds have seen a significant rise in assets under management (AUM), which surged 335.31% over the last five years to ₹33.32 lakh crore in July 2025, up from ₹7.65 lakh crore in July 2020, according to ICRA Analytics.

Systematic Investment Plans (SIPs) have become a popular tool for managing volatility, allowing investors to invest a fixed amount regularly and benefit from rupee cost averaging.

Inflows into equity mutual funds moved from an outflow of ₹3,845 crore in July 2020 to an inflow of ₹42,673 crore in July 2025.

Year-on-year, inflows rose 15.08% from ₹37,082 crore in July 2024. Month-on-month, inflows increased by 81.06% compared with ₹23,568 crore in June 2025.
Commenting on the AMFI data for July 2025, Ashwini Kumar, Senior Vice President and Head Market Data, ICRA Analytics, said, “Inflows into equity mutual funds has witnessed a sharp rise in the last few years as investors are adopting a long-term perspective, recognising that short-term market fluctuations are part of the journey toward wealth creation. Historical data shows that markets tend to recover and reward patient investors over time.”

“Despite global uncertainties, domestic investors remain optimistic about India’s economic trajectory. This confidence has translated into sustained inflows into equity MFs, even during periods of high volatility,” Kumar added.

Equity mutual funds have also delivered better returns compared to traditional savings instruments. Three-year returns have remained positive across categories. Small cap funds generated 22.56% over three years and 31.70% over five years, while mid cap funds delivered 22.20% and 27.36% respectively.

Kumar further said, “While market returns influence MF inflows, the entry and exit of investors from mutual funds also contribute to market volatility. Large-scale redemptions or inflows can amplify price movements, especially in mid- and small-cap segments. During periods of heightened volatility, retail investors often react emotionally, leading to panic selling or abrupt withdrawals. This behaviour can temporarily depress inflows, but SIPs and long-term investors tend to stay invested, cushioning the impact.”

According to ICRA Analytics, mutual funds offer schemes tailored to different risk appetites, from large-cap and balanced funds to sectoral and thematic funds, allowing investors to diversify and manage risk.

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