68% of Indian retail investors now invest in passive funds: Motilal Oswal survey
India's passive investment landscape has seen rapid expansion. The industry's Assets Under Management (AUM) stood at Rs 12.2 lakh crore in 2025 -- a 6.4-fold increase in six years, translating to a 36 per cent compound annual growth rate (CAGR).
- Oct 6, 2025,
- Updated Oct 6, 2025 3:10 PM IST
Motilal Oswal Mutual Fund has released the third edition of its Passive Survey 2025, revealing that 68 per cent of Indian investors now have exposure to passive funds. The survey, conducted between August and September 2025, gathered insights from over 3,000 investors and 120 distributors, including mutual fund distributors, registered investment advisors (RIAs) and wealth managers across the country.
According to the findings, investor adoption of passive funds has grown steadily, up from around 61 per cent in 2023. Awareness has also expanded, with 76 per cent of respondents familiar with index funds or exchange-traded funds (ETFs). Despite this growth, one-third of investors remain outside the passive segment, primarily due to greater trust in active funds or lack of familiarity with passive products.
India's passive investment landscape has seen rapid expansion. The industry's Assets Under Management (AUM) stood at Rs 12.2 lakh crore in 2025 -- a 6.4-fold increase in six years, translating to a 36 per cent compound annual growth rate (CAGR). Since March 2023, AUM has grown 1.7 times at about 26% CAGR, underscoring rising investor participation.
Among investors, key factors influencing passive fund selection include low costs (54 per cent), diversification (46 per cent), simplicity and transparency (46 per cent) and performance (29 per cent). Distributor sentiment echoed this trend, with 93 per cent of surveyed distributors familiar with passive products. Around 70 per cent already include them in client portfolios and an equal share plans to raise passive allocations by at least 5 per cent in FY25–26. At present, 70 per cent of clients hold fewer than three passive funds, highlighting the segment's supplementary role in portfolios.
Pratik Oswal, Chief of Passive Business at Motilal Oswal AMC, said passive strategies in India have evolved from niche allocations to mainstream investments, with growing acceptance of factor-based and innovative strategies.
For investors, financial independence (61 per cent) remains the primary investment goal, followed by retirement planning (49 per cent) and diversification (31 per cent). A long-term approach dominates, as 85 per cent of respondents hold investments for over three years, with 57 per cent preferring a mix of SIP and lumpsum modes.
Motilal Oswal Mutual Fund has released the third edition of its Passive Survey 2025, revealing that 68 per cent of Indian investors now have exposure to passive funds. The survey, conducted between August and September 2025, gathered insights from over 3,000 investors and 120 distributors, including mutual fund distributors, registered investment advisors (RIAs) and wealth managers across the country.
According to the findings, investor adoption of passive funds has grown steadily, up from around 61 per cent in 2023. Awareness has also expanded, with 76 per cent of respondents familiar with index funds or exchange-traded funds (ETFs). Despite this growth, one-third of investors remain outside the passive segment, primarily due to greater trust in active funds or lack of familiarity with passive products.
India's passive investment landscape has seen rapid expansion. The industry's Assets Under Management (AUM) stood at Rs 12.2 lakh crore in 2025 -- a 6.4-fold increase in six years, translating to a 36 per cent compound annual growth rate (CAGR). Since March 2023, AUM has grown 1.7 times at about 26% CAGR, underscoring rising investor participation.
Among investors, key factors influencing passive fund selection include low costs (54 per cent), diversification (46 per cent), simplicity and transparency (46 per cent) and performance (29 per cent). Distributor sentiment echoed this trend, with 93 per cent of surveyed distributors familiar with passive products. Around 70 per cent already include them in client portfolios and an equal share plans to raise passive allocations by at least 5 per cent in FY25–26. At present, 70 per cent of clients hold fewer than three passive funds, highlighting the segment's supplementary role in portfolios.
Pratik Oswal, Chief of Passive Business at Motilal Oswal AMC, said passive strategies in India have evolved from niche allocations to mainstream investments, with growing acceptance of factor-based and innovative strategies.
For investors, financial independence (61 per cent) remains the primary investment goal, followed by retirement planning (49 per cent) and diversification (31 per cent). A long-term approach dominates, as 85 per cent of respondents hold investments for over three years, with 57 per cent preferring a mix of SIP and lumpsum modes.