India’s mutual fund sector demonstrated remarkable resilience in FY25, with total AUM surging by 23% to reach ₹65.7 trillion despite market volatility. The AMFI-Crisil report highlights a maturing investor base embracing longer-term commitments, with notable increases in 5-year SIPs, women’s participation, hybrid fund adoption, passive investment strategies, and record-breaking equity inflows reshaping the industry landscape.
The Growing Sophistication of Indian Investors
India’s mutual fund landscape witnessed remarkable transformations during 2024-2025, characterized by investors’ increasing sophistication and willingness to explore beyond conventional investment options. Despite market fluctuations, more investors ventured into complex and potentially more lucrative investment schemes.
According to a comprehensive joint report by the Association of Mutual Funds in India (AMFI) and Crisil Intelligence, the industry’s assets under management (AUM) experienced a substantial 23% growth, reaching ₹65.7 trillion in FY25 from ₹53.4 trillion in the previous fiscal year.
Despite achieving an all-time high mutual fund penetration (MF AUM-to-GDP ratio) of 19.9% as of March 31, 2025, India still lags behind numerous developed economies. This gap indicates significant potential for further expansion within the domestic mutual fund industry.
Dominant Trends Reshaping India’s Mutual Fund Sector in FY25
Long-Term SIP Commitments Gain Traction
Systematic Investment Plans (SIPs) continued to be the preferred investment method, with data revealing a growing investor inclination toward long-term financial planning. Approximately 19% of SIP assets channeled through direct mutual fund schemes were allocated to categories spanning 5 years or longer, a substantial increase from just 4% recorded on March 31, 2020.
Similarly, one-third of SIP assets in regular plans fell within categories extending 5 years or beyond as of March 31, 2025, compared to only 12% five years earlier. Despite market volatility, SIP contributions remained robust throughout FY25, aggregating ₹2.88 trillion—representing a 45% surge from the ₹1.99 trillion recorded in FY24.
Rising Participation of Women Investors
Female participation in mutual fund investments showed notable growth, with women investors constituting 26% of individual investors in FY25, up from 24% in the preceding year.
The AMFI-Crisil report highlighted, “Increasing literacy rates and growing female workforce participation have significantly enhanced women’s economic contributions, establishing them as crucial participants in the mutual fund investor base.”
Hybrid Funds Gain Market Share
Hybrid funds emerged as an increasingly significant category in FY25, with assets expanding by 22% to reach ₹8.8 trillion by March 31, 2025, according to the AMFI-Crisil report.
“The expansion of hybrid funds reflects investors’ growing preference for asset allocation strategies to diversify their portfolios,” noted Amol Joshi, founder of Plan Rupee Investment Services.
Within this category, multi-asset allocation funds—which distribute investments across equities, debt, gold, and real estate investment trusts—accounted for 12% of the hybrid funds segment in FY25. Meanwhile, balanced advantage funds or dynamic asset allocation funds dominated with a 33% market share, strategically adjusting equity exposure during market downturns and increasing debt allocation during peak stock market valuations.
Passive Funds Experience Explosive Growth
Net inflows into passive funds more than doubled, reaching ₹1.4 trillion in FY25 compared to ₹0.61 trillion in FY24.
Gold exchange-traded funds (ETFs) witnessed exceptional growth amid rising gold prices and global uncertainty. Investments in Gold ETFs surged to ₹14,582 crore in FY25 from ₹5,248 crore in FY24.
“This growing interest in passive schemes indicates investors’ recognition of the benefits of low-cost funds in certain categories where actively managed funds may offer limited outperformance potential, allowing them to avoid higher management fees,” explained Kavitha Menon, founder of Probitus Wealth.
Record-Breaking Equity Asset Inflows
Equity mutual funds attracted unprecedented inflows of ₹4.17 trillion in FY25—the highest ever recorded in a fiscal year and more than double the net inflows of FY24.
This substantial influx, combined with valuation gains, propelled equity-oriented scheme assets by 25.4% in FY25, reaching ₹29.45 trillion by March 31, despite the Nifty Total Returns Index rising by just 6.7% during the same period.
