The mutual fund industry has expanded rapidly in recent years with a wave of new players entering the market. However, for some of these fund houses, the timing of their launch has proved challenging as prolonged market volatility has limited their ability to attract assets.
The Securities and Exchange Board of India (Sebi) has granted final approval to 12 fund houses to launch schemes since March 2024, of which seven have already commenced operations. However, as of May 2026, the combined assets under management (AUM) of these seven fund houses stood at Rs 27,616 crore, according to data shared by PrimeMF Database.
In comparison, the mutual fund industry has added Rs 28.18 lakh crore in assets since FY24 and Rs 15.84 lakh crore since FY25 till May 2026, highlighting the uphill task faced by new entrants in scaling up.
Among the seven operational fund houses, only JioBlackRock Mutual Fund has crossed Rs 10,000 crore in average monthly assets. Even within the Rs 27,616 crore corpus, nearly Rs 10,000 crore is concentrated in liquid, overnight and ultra-short duration schemes, largely driven by corporate treasury investments.
Of the five fund houses that have launched active schemes, only Abakkus Mutual Fund has accumulated more than Rs 5,000 crore in active equity assets. This compares with an increase of Rs 12.65 lakh crore in active equity assets across the industry since FY24 and Rs 6.68 lakh crore since FY25.
The struggle of new fund houses to gain market share comes at a time when equity markets have witnessed extended volatility. Prasanna Pathak, deputy CEO, The Wealth Company Mutual Fund, believes market uncertainty has made it harder for new players to attract investors, as customers tend to prefer established brands with proven track records during uncertain periods.
“For a distributor-led model like The Wealth Company, the key challenge is earning mindshare and confidence among intermediaries who already have several established options,” he said. Pathak added that positive investor outcomes and distributor trust would be crucial for future growth. Fund houses with a clear identity, strong governance and differentiated capabilities, he said, would be better positioned to build scale and create long-term value.
Vaibhav Chugh, CEO, Abakkus Mutual Fund, said that despite the industry being concentrated among the top 10 fund houses, there remains significant opportunity for new AMCs as mutual funds gain wider acceptance as long-term wealth creation vehicles.
“The biggest challenge for any new fund house is establishing credibility among investors,” he said, adding that a defined investment philosophy, time and consistent execution are essential to building confidence.
Chugh pointed out that gaining visibility among distributors and investors remains difficult due to limited shelf space and intense competition, making asset accumulation a gradual process requiring sustained engagement. He added that the rise of passive investing among first-time investors has further intensified the competitive landscape.
However, he believes volatility can also create opportunities for smaller active fund managers to identify emerging opportunities, particularly in smaller and under-researched businesses. Long-term performance, a disciplined investment process and sustained investor trust, he said, remain the key drivers of growth.
Besides the seven operational players, five entities holding mutual fund licences are yet to commence operations. These include ASK Mutual Fund, Alphagrep Mutual Fund, Monarch Networth Capital, Nuvama Asset Management and Wealth First Portfolio Management.
Nimesh Mehta, chief business officer, Nuvama Asset Management, said the AMC plans to enter the specialised investment fund (SIF) market first before launching mutual fund offerings, leveraging its experience in alternative investment funds (AIFs) and aiming to gain an early advantage in the segment.
Every financial journey has a turning point. What’s yours?
Financial Express is launching a new series highlighting real experiences with money, investments, and the taxman. Did a sudden tax rule catch you off guard? Did a piece of financial advice change your life? Your story could provide invaluable, practical lessons for thousands of fellow taxpayers. Share your experience with us. We respect your privacy: no stories will be featured without a direct conversation and your full consent. Thank you.