India’s mutual fund industry saw quite a few changes in 2024-2025, particularly in terms of the improving sophistication of investors. More investors ventured beyond regular and direct mutual funds to more complex, and potentially more rewarding, investment schemes despite the market volatility.
Overall, the Indian mutual fund industry’s assets under management (AUM) jumped 23% to ₹65.7 trillion in FY25 from ₹53.4 trillion in the previous financial year, according to a joint report by the Association of Mutual Funds in India and Crisil Intelligence.
The report, however, pointed out that India’s mutual fund penetration (MF AUM-to-GDP)—while being at all-time high of 19.9% as on 31 March 2025—was still lower than that of many developed economies. “This indicates there is considerable scope for growth of the domestic MF industry,” the report said.
Here are the Indian mutual fund industry’s top trends in FY25.
5-year SIPs
Most investors in mutual funds make periodic investments, typically monthly, though systematic investment plans. SIP data in the Amfi-Crisil annual report for FY25 indicates a growing investor preference for long-term approach.
About 19% of the SIP assets held through direct mutual fund schemes were in categories of 5 years or longer, up from 4% as on 31 March 2020. In other words, more investors committed to periodically allot a specific amount towards investing in a mutual fund for at least 5 years.
One-third of SIP assets held through regular plans were also in categories of 5 years or longer as on 31 March 2025, up from 12% as on 31 March 2020, the data showed.
SIP growth remained steady in FY25 (1 April 2024 to 31 March 2025) despite market volatility. The periodic contributions during the year added up to ₹2.88 trillion, a 45% jump from ₹1.99 trillion in FY24.
Women investors
More women are deciding to park their investments in mutual funds. Women investors accounted for 26% of the total number of individual investors in FY25, up from 24% in the year before.
“The rise in literacy rates and the growing presence of women in the workforce have been instrumental in enhancing their economic contributions and, as a result, women are now emerging as a key participant in the MF investor base,” the Amfi-Crisil report said.
Hybrid funds
Hybrid funds became a larger category in FY25, with assets held by such funds expanding 22% to ₹8.8 trillion as of 31 March 2025, according to the Amfi-Crisil report.
“The increase in size of hybrid funds shows investors’ growing preference for asset allocation funds to diversify their investments,” said Amol Joshi, founder of Plan Rupee Investment Services.
Within the hybrid category, multi-asset allocation funds that invest across a wide range of asset classes—such as equities, debt, gold, and real estate investment trusts—accounted for 12% of the hybrid funds category in FY25.
Balanced advantage funds or dynamic asset allocation funds—which typically increase equity exposure when markets fall and increase debt exposure when stock markets are at peak valuations—dominated the hybrid funds category with a 33% share.
Passive funds
Net flows towards passive funds more than doubled to ₹1.4 trillion in FY25 from ₹0.61 trillion in FY24.
Gold exchange traded funds (ETFs) saw a significant jump in investment flows as gold prices rallied amid global uncertainty. Investments into Gold ETFs surged to ₹14,582 crore in FY25 from ₹5,248 crore in FY24, according to the Amfi-Crisil report.
“This growth interest in passive schemes indicates that investors are gradually seeing the merits of low-cost funds in certain categories, where outperformance or alpha creation potential of managed funds may be limited, (but they) prefer saving on higher fund management fees,” said Kavitha Menon, founder of Probitus Wealth.
Equity assets
Equity mutual funds saw a record inflow of ₹4.17 trillion in FY25, the highest ever in a financial year and more than double the net inflows into such funds in FY24.
This, combined with valuation gains, propelled assets under management of equity-oriented schemes by 25.4% in FY25 to ₹29.45 trillion as on 31 March. The Nifty Total Returns Index’s rose 6.7% in FY25.