A remarkable feature of India’s investment landscape since 2014 has been the rapid growth of the mutual fund industry. This surge has been driven by a fundamental shift in household investment preferences and the increasing financialisation of savings across the country.
From the days of a single product offered by one company in the 1960s, to an industry now served by dozens of asset management firms offering over 2,500 schemes to more than 232 million account holders, the mutual fund sector has seen an unprecedented boom. A major driver of this growth has been the growing preference of retail investors for Systematic Investment Plans (SIPs).
According to Reserve Bank of India data, the share of mutual funds in the financial assets of Indian households has risen significantly—from just 0.8% in 2013 to 6.1% in 2023. This increase has largely come at the cost of traditional bank deposits, whose share has fallen from 57% to 37.2% over the same period. The trend clearly highlights a growing investor preference for higher-return, higher-risk mutual funds over lower-interest fixed deposits.
As of February 2025, 44 mutual fund companies collectively managed assets worth nearly Rs 65 lakh crore, up from Rs 12 lakh crore a decade ago. The trend accelerated after Covid-19, with assets under management (AUM) doubling in the five-year period since February 2020.
However, the stock market correction since September 2024 has shaken investor confidence. As Teena Jain Kaushal notes in this special issue’s cover story, the SIP discontinuation-to-registration ratio rose to 122% in February 2025, the highest since April 2021.
Yet, despite the market correction, experts believe that the appeal of SIPs is far from fading.
Pointing out that market volatility often causes first-time investors to pause or discontinue SIPs, A. Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC Ltd, says seasoned investors usually stay invested or even increase contributions, viewing corrections as opportunities.
Elsewhere, ace investor Navneet Munot, the MD & CEO of HDFC Asset Management, distils the SIP success formula in a few words: Sound investment, Time, and Patience. “Follow this,” he says, “and long-term success becomes inevitable.”
Radhika Gupta, MD & CEO of Edelweiss Asset Management, highlights the advantage of SIPs in enabling a piecemeal investment approach without compromising portfolio quality. “Given stock market volatility and limited investor expertise, staggered investing through SIPs is a smart strategy,” she says.
So, as new entrants to the world of systematic investing get tested in this time of market volatility and uncertainty, surviving a bear attack is not about outrunning it, but getting on top and riding out the storm.
