“The growth in investor folios moderated in 2025, but on a high base of over 35% jump in 2024. The pace of inflows eased as recent market performance weighed on investor behaviour,” Sandeep Bagla, CEO, Trust Mutual Fund told ET.
According to Bagla, benchmark indices such as the Nifty 50 delivered around 10% returns while performance across small-cap and mid-cap segments was relatively weaker. “Equity returns lagged alternative asset classes such as gold and silver as well as select emerging markets, which weighed on incremental investor allocations,” he said.
Growth in inflows into equity schemes, which make up about 45% of total AUM, halved in 2025. Net equity AUM rose 17% to ₹35.7 lakh crore in 2025, sharply lower than the 40% and 43% growth recorded in 2024 and 2023. Debt funds saw only a mild slowdown, with net AUM rising 15% in 2025 compared with 21% a year earlier.
AgenciesMutual Understanding: AUM growth at three-year low, folio additions least in 5 years; high base seen as a reason
The fund flow through systematic investment planning (SIP) route at ₹3.3 lakh crore continued to grow in double digits in 2025 but at a slower pace of 24.6% compared with a robust 45.7% growth in the previous calendar year.
Although the number of retail investors continues to rise, concerns persist over the sustainability of equity market returns amid global uncertainties, rising bond yields, firm commodity prices and elevated valuations in Indian equities.
The slowdown has been more pronounced among investors in large urban centres and higher-value contributors even as SIP inflows from smaller towns and cities continue to grow steadily, said the head of strategy of an Asset Management Company. Investors committing larger monthly sums tend to react more sharply to periods of underperformance than smaller-ticket retail investors, he added.
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