Mutual fund assets jump to Rs 81 lakh crore in 2025 as industry extends bull run; 2026 outlook

India’s mutual fund industry extended its multi-year bull run in 2025, adding a massive Rs 14 lakh crore to its asset base and pushing total assets under management (AUM) to a record Rs 81 lakh crore by November. The expansion was driven by sustained retail participation, record systematic investment plan (SIP) inflows and steady domestic money that helped cushion the impact of foreign portfolio investor (FPI) outflows.

According to data from the Association of Mutual Funds in India (AMFI), the industry recorded net inflows of about Rs 7 lakh crore during the year and added 3.36 crore new investors, underlining the deepening penetration of mutual funds across income groups and geographies. SIPs alone contributed nearly Rs 3 lakh crore, reinforcing their position as the backbone of industry flows.

Venkat Chalasani, Chief Executive Officer of AMFI, said the outlook for the industry remains constructive, with consistent SIP inflows continuing to strengthen market resilience even amid global uncertainty. He noted that going forward, fund flows are likely to be influenced by market valuations and global developments, with investors showing a growing preference for large-cap, diversified and hybrid strategies.

2025 inflows

The rise in inflows lifted industry AUM by around 21% from Rs 67 lakh crore at the end of 2024 to Rs 81 lakh crore by November 2025. While this growth was slower than the 31% surge seen in 2024 and the 27% increase in 2023, it reinforces a longer-term upward trend. Over the past five years, the mutual fund industry has added nearly Rs 50 lakh crore to its asset base, reflecting a sustained shift towards financial assets.

Himanshu Srivastava, Principal Manager – Research at Morningstar Investment Research India, said the expansion in 2025 was driven by a combination of positive equity market performance and disciplined retail participation through SIPs. He added that rising financial awareness, increasing first-time investors and a growing preference for mutual funds as a transparent, well-regulated investment vehicle have played a key role. 

Equity funds

Equity-oriented schemes remained the biggest draw, attracting net inflows of over Rs 3.5 lakh crore. Equity funds have now seen uninterrupted monthly inflows since March 2021, underscoring investor confidence in India’s long-term growth story. Market performance supported sentiment, with the Nifty 50 and BSE Sensex rising about 8.4% and nearly 10% respectively during the year.

SIP contributions remained robust throughout 2025, crossing Rs 29,000 crore consistently in September, October and November, and hitting an all-time high of Rs 29,529 crore in October. Annual SIP investments reached a record Rs 3.03 lakh crore. Harsh Jain, Co-founder and COO of Groww, said this trend points to a structural change in investor behaviour, with SIPs increasingly becoming the default investment route, particularly among younger investors.

Debt funds

Debt schemes also attracted strong interest, with inflows close to Rs 3 lakh crore, supported by attractive yields, expectations of a softer interest-rate cycle and the use of debt funds for short-term cash management and portfolio diversification. Gold funds saw renewed traction as well, garnering inflows of Rs 31,300 crore amid economic uncertainty and geopolitical risks, with AUM more than doubling to Rs 1.10 lakh crore by November.

On the regulatory front, Sebi announced changes to the mutual fund expense framework, including the introduction of a Base Expense Ratio and lower brokerage caps, aimed at enhancing transparency. The new rules will take effect from April 1, 2026.

Investing in 2026

Looking ahead to 2026, market experts advise investors to stay disciplined. Arjun Guha Thakurta, Executive Director at Anand Rathi Wealth, said maintaining SIPs, aligning equity exposure with risk appetite and ensuring diversification remain the core principles of long-term wealth creation. With India’s macro outlook remaining supportive, he expects balanced portfolios and a long-term approach to continue rewarding investors in the years ahead.

Guha Thakurta said: "From a portfolio construction perspective, investors should focus on building a balanced strategy rather than chasing short-term market themes. Diversification across equity and debt remains critical. For medium-term investment horizons of one to three years, a 60:40 allocation between equity and debt is appropriate, while investors with longer-term horizons of over three years may consider an 80:20 mix. Within equity mutual funds, diversification across segments and investment styles is equally important. Investors should spread allocations across market-capitalisation-based funds as well as select strategy-oriented categories such as focused, value, and contra funds. A broad market-cap allocation of approximately 55% large-cap, 25% mid-cap, and 20% small-cap funds can help balance growth potential with stability. Such an approach ensures exposure across sectors and themes, reduces concentration risk arising from any single category or market phase, and helps maintain liquidity and resilience within the portfolio."