MUTUAL FUND BRIEFING – MAY 2025
May 2025 saw overall mutual fund AUM expand from ₹70.00 Trillion to ₹72.20 Trillion; supported by MTM gains. Active debt funds saw net outflows of ₹(15,909) Crore, a reversal of April. Active equity funds saw modest inflows of ₹19,013 Crore, depleting for the fifth month in a row. However, action was in the alternate asset classes, predominantly in the .
Hybrid funds saw best net inflows of ₹20,984 Crore. Passive funds saw tepid inflows of ₹5,526 Crore. In equity funds, the demand thrust shifted from sectoral and thematic funds to flexi-cap, multi-cap, small cap, and mid-cap funds. Gross SIP flows in May 2025 scaled a new high of ₹26,668 Crore, while SIP stoppage ratio tempered from 353% to 73% MOM.
KEY MUTUAL FUND TRENDS – SEGMENT LEVEL (MAY 2025)
Here are mutual fund segment level trends for May 2025.
- Average assets under management (AAUM) of all mutual fund schemes surged on MOM basis from ₹69.50 Trillion to ₹72.18 Trillion in May 2025. The AAUM is now at a new all-time high, with average AUM 23.2% higher yoy.
- Last couple of years saw steady shift in AUM mix from active debt to active equity; but intensity has reduced. The share of active equity funds in AUM for May 2025 was up 90 bps from 58.9% to 59.8% MOM; although AUM share is up just 120 bps yoy.
- Passive fund share was 20 bps higher MOM at 12.7% in May 2025 but flat on yoy basis. The share of active debt funds was flat MOM at 15.0% in May 2025 while share is down 70 bps yoy. Liquid / money market funds share reduced 90 bps MOM from 13.5% to 12.6% in May 2025, but down just 30 bps yoy.
- The AUM shares of individuals and institutions had approximately stabilized, although the equity rally saw individual share rise in May 2025. Between May 2024 and May 2025, the share of individual investors in overall MF AUM is flat at 60.6%. Individual share had peaked at 61.9% in September 2024, and has since stayed below that.
- How individual investors allocated across MF categories? As of May 2025, individual investors have a share of 34% in active debt funds but just 11% in short term money market schemes; a whopping 88% of equity fund assets, but just 12% of passive assets.
- What about an individual investor’s allocation basket? As of May 2025, individual investors have 87% of their MF portfolio in active equity schemes and 8% in active debt funds. Liquid funds at 2% and ETFs at 3% are fairly small. Institutions and corporates have 28% of their corpus in liquid funds, 28% in ETFs / FOFs, 25% in active debt funds and 19% in active equity funds.
As of May 2025, mutual fund AAUM grew 23.2% yoy. Assets of individual investors in this period grew 23.1% while AUM of institutional investors grew 23.4%.
KEY MUTUAL FUND TRENDS – FOLIOS AND TICKET SIZES (MAY 2025)
Folios are investor accounts unique to an AMC; an approximation of retail intensity.
- There were 23.83 Crore folios as of the close of May 2025 of which retail investors accounted for nearly 91.7%. In addition, HNIs accounted for 7.8% of folios while institutions accounted for balance 0.5%. In case of active debt funds, retail investors account for 71.8% of folios, while HNI investors account for 26.0%. HNIs also have high share of folios of liquid funds (24.2%) and hybrid funds also at (24.2%).
- Between March 2009 and September 2014, mutual fund folios contracted from 4.76 Crore to 3.95 Crore. However, between September 2014 and May 2025, the number of mutual fund folios have jumped from 3.95 Crore to 23.83 Crore. That is a jump of 503% in folios. This is after the elimination of nearly 1.43 Crore dormant folios this year.
- Let us look at average ticket size for equity and debt products. For equity funds (predominantly a retail product), the average ticket size is down -6% yoy at ₹1.80 Lakhs. For debt funds, average ticket size is up 10% yoy at ₹17.57 Lakhs. The net AUM of Indian mutual funds at ₹72.18 Trillion is spread across 23.83 Crore folios, giving a per folio ticket size of ₹3.03 Lakhs; an improvement after the dormant folio clean-up.
- Contrary to popular perception, retail investors are not myopic in their approach to equity funds. As of May 2025, retail investors hold 54.9% of equity fund assets and 44.3% of non-equity assets for over 2 years. Retail investors have held 73.6% of equity funds for minimum 1 year.
While retail investors have an average account size of ₹78,177, the HNI investors have an average account size of ͅ₹9,46,393.
KEY MUTUAL FUND TRENDS – GEOGRAPHICAL MIX (MAY 2025)
How are cities and towns contributing to the mutual fund growth story?
- The mutual fund market is divided into T30 (top-30) cities and B30 (cities beyond top-30). If you compare May 2025 with April 2025, T30 assets were up 3.64% at ₹58.91 Trillion. Total assets of B30 centres grew 4.84% to ₹13.28 Trillion. If we only look at the share of individuals; in May 2025, B30 cities accounted for 27.33% of individual assets while share of individuals in T-30 cities stood at 72.67%. Institutions have a T-30 bias.
- Despite the Direct route available since 2013, only 47% of overall assets came through the Direct route, with just about 23% of retail investors and 27% of HNIs investors.
Clearly, direct investing is yet to pick up in a big way among individual investors, although it could be more about push than pull!