Indian households’ capital market participation is undergoing a structural shift, with mutual funds and equities nearly doubling their share of domestic financial savings in a single year, according to Bajaj Mutual Fund’s latest market symposium.
Mutual funds and equities accounted for 15 per cent of household financial savings in FY25, up from 9 per cent in FY24 and 8 per cent in FY19. Meanwhile, currency and bank deposits fell to 41 per cent of household financial savings in FY25 from 43 per cent in FY24 and 48 per cent in FY19. Mutual fund assets as a proportion of bank deposits rose from 16 per cent in 2020 to 31 per cent in 2025.
Yet rising allocations haven’t translated into proportionate investor gains, Morningstar data cited by Bajaj Mutual Fund showed. Over three years, funds returned 10.47 per cent against investors’ 7.79 per cent; over five years, 8.79 per cent versus 6.25 per cent. The gap widened over a decade, with 12.33 per cent for funds against just 6.54 per cent for investors, suggesting longer horizons haven’t cured poor timing. The divergence peaks in sectoral bets: technology funds delivered 27.49 per cent over three years, but investors captured only 2.71 per cent, versus narrower gaps in flexi-cap (11.15 per cent versus 8.05 per cent) and multi-cap (12.02 per cent versus 8.58 per cent).
Direct channels now account for 45 per cent of mutual fund investments, while India’s AUM-to-GDP ratio of 21.1 per cent still trails emerging-market peers like Brazil and South Africa.
First Published: Sep 02 2026 | 7:15 PM IST