Will India's Mutual Fund Industry's AUM Exceed Rs 300 Trillion by 2035?
Click to start listening
Synopsis
With digital adoption and increased participation from Gen Z and women, India's mutual fund industry is on the verge of a monumental transformation. Projections indicate that AUM could surpass Rs 300 trillion by 2035, driven by a shift towards long-term SIP investments. This growth reflects the changing landscape of financial engagement across the nation.
Key Takeaways
- Projected AUM to exceed Rs 300 trillion by 2035.
- Significant growth driven by digital adoption and participation from younger generations.
- SIPs play a crucial role in long-term investment strategies.
- Strong market performance and sustained inflows contribute to AUM increase.
- Resilience of the mutual fund sector despite global uncertainties.
Mumbai, Dec 23 (NationPress) The assets under management (AUM) of India's mutual fund sector are anticipated to exceed Rs 300 trillion by the year 2035. This growth is driven by enhanced digital engagement, increasing involvement from Gen Z, women, and families in smaller towns, along with a growing trend towards long-term investment via SIPs, according to a report released on Tuesday.
The Indian mutual fund landscape experienced significant growth in 2025, with AUM reaching Rs 81 trillion in November, an increase from Rs 68 trillion in November 2024, marking an impressive year-on-year growth of 18.69 percent and nearly tripling over the last five years, achieving a CAGR of 21.91 percent.
Continuous net inflows, robust market performance, and increased retail participation, facilitated by the digitization and financialization of savings, have all played a pivotal role in this upward trajectory of AUM, as noted by ICRA Analytics in their report.
By May 2025, the industry’s AUM had already surpassed Rs 70 trillion, and within six months, it crossed Rs 80 trillion despite global uncertainties.
Given this growth pattern, experts believe that India is strategically positioned to exceed the Rs 100 trillion milestone in the coming years, provided that current inflow trends and market conditions remain favorable.
“Beyond the Rs 100 trillion mark, the long-term outlook indicates even greater transformative growth. Despite geopolitical challenges and global uncertainties, the domestic mutual fund sector has demonstrated resilience, fueled by optimism regarding the Indian economy's growth prospects,” stated Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics.
The AUM of open-ended equity funds has surged fourfold over a five-year period, increasing from Rs 9 trillion in November 2020 to Rs 36 trillion in November 2025.
Year-on-year, this category has seen a growth of 17.45 percent from Rs 30 trillion in November 2024.
“Flexi-cap funds tend to exhibit strong year-on-year growth due to their strategic flexibility, diversified exposure, and favorable market conditions. Following flexi-cap funds, multi-cap and large and mid-cap fund categories witnessed increases of 24.78 percent and 22.78 percent year-on-year, respectively,” stated Kumar.
The corpus of debt funds also increased by 14.82 percent year-on-year, rising from Rs 17 trillion in November 2024 to Rs 19 trillion in November 2025.
In terms of equity fund performance, small cap funds recorded the highest growth over five and ten-year periods, achieving a CAGR of 24.91 percent and 16.70 percent, respectively (as of November 30).
Systematic Investment Plans (SIPs) have emerged as one of the most robust engines of growth within the Indian mutual fund sector.
By November 2025, SIP AUM reached Rs 16.53 trillion, representing over 20 percent of the mutual fund industry's total AUM, underscoring their crucial role in promoting long-term asset accumulation.
“The expanding middle class and increasing financial literacy are encouraging more individuals to engage in financial planning, particularly through the SIP avenue,” remarked Kumar.
Point of View
I believe these projections reflect a significant evolution in the Indian financial landscape. The rise in mutual fund AUM will likely enhance financial inclusion and empower more individuals to invest in their futures. It's clear that the mutual fund sector is adapting to the changing demographics and economic conditions, promising a robust trajectory for years to come.
NationPress
23/12/2025
Frequently Asked Questions
What is AUM in mutual funds?
AUM stands for Assets Under Management, which indicates the total market value of assets that a mutual fund manages on behalf of its investors.
How do SIPs contribute to mutual fund growth?
Systematic Investment Plans (SIPs) encourage investors to invest a fixed amount regularly, which not only helps in disciplined investing but also benefits from rupee cost averaging.
What factors are driving the growth of India's mutual fund sector?
Key factors include digital adoption, increased participation from younger demographics, and a shift towards long-term investment strategies, particularly through SIPs.
