SECTORS PREFERRED BY MUTUAL FUNDS IN OCTOBER 2025?
Which were the most preferred sectors for mutual funds in October 2025? Obviously, a one-month change gives a skewed and myopic picture; so, we looked at 1-year change between October 2024 and October 2025. In terms of absolute AUM accretion of MFs; BFSI, Retail, Pharmaceuticals, Automobiles, Oil & Gas, Telecom, and Metals/Mining were the most preferred sectors. That is along expected lines. The big change has been retail coming to second slot, largely helped by digital retail names like Eternal, Swiggy etc.
The problem with the absolute growth is that it is naturally biased in favour of the heavyweight sectors. To capture the silent growth drivers, we also looked at the percentage gains in AUM over the last 1 year between October 2024 and October 2025. In terms of MOM percentage change; Aviation, Retail, Diamonds, Telecom, and BFSI were the most preferred sectors. Retail, Telecom and BFSI are appearing in both the lists.
There is another perspective. In this analysis, we look at MF equity holdings overall (including equity holdings in hybrid and passive funds). As of October 2025; while active equity fund AUM was ₹35.17 Trillion, overall equity holdings of Indian MFs was ₹49.91 Trillion. That means, ₹14.74 Trillion (29.5%) of MF equity holdings was accounted for by the equity portion of hybrid funds, index funds, and index ETFs.
SECTORS WITH MF AUM ABOVE ₹1 TRILLION
The overall equity AUM of all mutual funds stood at ₹49.91 Trillion in October 2025; compared ₹47.62 Trillion in September, ₹46.64 Trillion in July, and ₹41.61 Trillion in October 2024. October 2025 AUM is 19.95% higher than the year-ago AUM of ₹41.61 Trillion.
| Sectors | Oct-24 | Jul-25 | Sep-25 | Oct-25 |
| Banking & Finance | 11,51,897 | 13,69,066 | 13,90,673 | 14,76,514 |
| Auto & Auto Ancillaries | 3,96,292 | 4,11,198 | 4,54,507 | 4,46,802 |
| IT-Services | 4,05,321 | 3,96,676 | 3,94,102 | 4,19,636 |
| Pharmaceuticals | 3,48,582 | 4,02,813 | 3,95,091 | 4,08,374 |
| Oil & Gas | 2,38,753 | 2,67,780 | 2,71,067 | 2,89,116 |
| FMCG | 2,17,837 | 2,28,892 | 2,29,002 | 2,37,808 |
| Retail | 1,18,420 | 1,80,240 | 1,96,503 | 1,95,852 |
| Capital Goods | 1,58,801 | 1,78,498 | 1,78,446 | 1,84,892 |
| Telecom | 1,24,492 | 1,48,884 | 1,51,828 | 1,63,827 |
| Metals & Mining | 1,29,378 | 1,35,031 | 1,50,690 | 1,58,237 |
| Power | 1,32,993 | 1,31,868 | 1,39,530 | 1,46,470 |
| Infrastructure | 1,31,768 | 1,31,434 | 1,31,438 | 1,40,280 |
| Chemicals & Fertilisers | 1,15,682 | 1,43,014 | 1,34,251 | 1,38,039 |
| Consumer Durables | 94,107 | 1,07,323 | 1,09,763 | 1,16,589 |
| Construction Materials | 88,860 | 1,00,293 | 1,00,704 | 1,01,254 |
Data Source: AMFI, MF Websites (₹ in Crore)
These top 15 sectors with AUM above ₹1 Trillion account for 92.6% of total equity AUM of Indian mutual funds. The list almost matches with the most heavyweight sectors on the index. If you look at the 5 most preferred sectors by mutual funds in terms of exposure, Pharmaceuticals is interesting, despite not being an index heavyweight. Capital Goods, Retail, Telecom, and Metals & Mining have built heft in recent months.
SECTORS WITH BEST RUPEE AUM ACCRETION IN OCTOBER 2025
Absolute AUM accretion may be vulnerable to the size effect, but they are essential to understand the changes that are most significant to the market cap.
| Sectors | Oct-24 | Oct-25 | AUM Change | (% Change) |
| Banking & Finance | 11,51,897 | 14,76,514 | 3,24,617 | 28.18% |
| Retail | 1,18,420 | 1,95,852 | 77,432 | 65.39% |
| Pharmaceuticals | 3,48,582 | 4,08,374 | 59,792 | 17.15% |
| Auto & Ancillaries | 3,96,292 | 4,46,802 | 50,510 | 12.75% |
| Oil & Gas | 2,38,753 | 2,89,116 | 50,363 | 21.09% |
| Telecom | 1,24,492 | 1,63,827 | 39,335 | 31.60% |
| Metals & Mining | 1,29,378 | 1,58,237 | 28,859 | 22.31% |
| Capital Goods | 1,58,801 | 1,84,892 | 26,091 | 16.43% |
| Consumer Durables | 94,107 | 1,16,589 | 22,482 | 23.89% |
| Chemicals & Fertilisers | 1,15,682 | 1,38,039 | 22,357 | 19.33% |
| FMCG | 2,17,837 | 2,37,808 | 19,971 | 9.17% |
| Others | 33,427 | 51,612 | 18,185 | 54.40% |
| Aviation | 22,693 | 38,102 | 15,409 | 67.90% |
| IT-Services | 4,05,321 | 4,19,636 | 14,315 | 3.53% |
| Power | 1,32,993 | 1,46,470 | 13,477 | 10.13% |
Data Source: AMFI, MF Websites (₹ in Crore)
There are some interesting points that emerge. In the top-5, BFSI, Auto, and Oil are index heavyweights. Other significant AUM accretion stories are Retail, Pharma, Telecom, and Mining/Metals. The sectors to watch are retail and mining. Retail has been largely helped by the digital sellers like Eternal and Swiggy. Mining & Metal stocks benefited from the hopes of improved Chinese demand as they get into trade pacts with India and the US. Chemicals was the one sector that has dropped out due to the pressure in recent months. Telecom continues to be led by Bharti Airtel, which has now emerged as the third most valuable stock by market cap in India.
SECTORS WITH BEST PERCENTAGE AUM ACCRETION IN OCTOBER 2025
To neutralize size effect, we also look at the percentage change in AUM on a yoy basis, to give credit to smaller sized sectors that score high.
| Sectors | Oct-24 | Oct-25 | AUM Change | (% Change) |
| Aviation | 22,693 | 38,102 | 15,409 | 67.90% |
| Retail | 1,18,420 | 1,95,852 | 77,432 | 65.39% |
| Others | 33,427 | 51,612 | 18,185 | 54.40% |
| Diamond & Jewellery | 27,609 | 36,436 | 8,827 | 31.97% |
| Telecom | 1,24,492 | 1,63,827 | 39,335 | 31.60% |
| Banking & Finance | 11,51,897 | 14,76,514 | 3,24,617 | 28.18% |
| Consumer Durables | 94,107 | 1,16,589 | 22,482 | 23.89% |
| Metals & Mining | 1,29,378 | 1,58,237 | 28,859 | 22.31% |
| Agri | 15,671 | 19,131 | 3,460 | 22.08% |
| Oil & Gas | 2,38,753 | 2,89,116 | 50,363 | 21.09% |
| Shipping & Logistics | 38,312 | 46,128 | 7,816 | 20.40% |
| Chemicals & Fertilisers | 1,15,682 | 1,38,039 | 22,357 | 19.33% |
| Pharmaceuticals | 3,48,582 | 4,08,374 | 59,792 | 17.15% |
| Capital Goods | 1,58,801 | 1,84,892 | 26,091 | 16.43% |
| Realty | 56,463 | 64,518 | 8,055 | 14.27% |
Data Source: AMFI, MF Websites (₹ in Crore)
In terms of percentage accretion in market cap over the last 1 year, Aviation and Retail are at the top. While aviation has been led by the rally in Indigo Airways (Interglobe), retail is more of a digital story comprising of names like Eternal and Swiggy. With the sharp rally in gold prices, even diamond and jewellery stocks are seeing a rally in AUM, albeit on a fairly small base. Others like Telecom and Banking are leaders in absolute growth too.
Did any sector witness percentage depletion in AUM? The negative list includes Media, Abrasives, Paper, Textiles, and Plastic Products. Some of them are typically export stories, where the punitive sanctions imposed by Trump has taken its toll. However, the domestic India-specific stories appear to be really doing the weightlifting.