Will India's Mutual Fund Penetration Reach 20% by 2035?
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Synopsis
India's mutual fund penetration is on the verge of doubling, set to reach 20% by 2035. This transformation, driven by younger investors and increased participation from smaller cities, marks a major shift in investment patterns within the country, as revealed by a new report.
Key Takeaways
- Mutual fund penetration in India is set to double by 2035.
- Growth will be fueled by younger investors and smaller cities.
- Mutual fund assets could exceed Rs 300 lakh crore.
- Digital platforms are enhancing investment accessibility.
- Long-term investments are on the rise.
New Delhi, Dec 9 (NationPress) The penetration of mutual funds in India is projected to increase from 10 percent to 20 percent in the next decade, indicating a significant transformation in the nation's investment behavior, according to a recent report released on Tuesday.
This forecast is part of the ‘How India Invests 2025’ report by Bain & Company in collaboration with Groww, which reveals that the forthcoming growth phase will be fueled by enhanced involvement from smaller towns and a fresh wave of young investors.
The report anticipates that India's mutual fund assets under management could surpass Rs 300 lakh crore by 2035, while direct equity investments may reach Rs 250 lakh crore.
It underscores the rapid expansion of the mutual fund landscape, with an increasing number of households opting for market-linked investment opportunities.
This transformation is being bolstered by digital platforms, favorable regulatory frameworks, and increasing investor confidence, with a growing preference for long-term wealth accumulation over conventional savings methods.
The report emphasizes that the majority of the upcoming growth will stem from mass and mass-affluent families residing outside the top 30 urban centers.
Moreover, many high-net-worth individuals from the subsequent 70 cities are anticipated to engage more actively in mutual funds.
This broadened participation is evident in the surge of long-term investments; the proportion of assets held for over five years in the industry has more than doubled recently.
Saurabh Trehan, Partner and Head of Bain’s Financial Services practice in India, mentioned that Indian families are gradually shifting from a savings-centric mindset towards a more investment-focused approach.
He further noted that young, first-time investors—especially those from outside major metropolitan areas—are playing a pivotal role in enhancing the domestic investor base.
With significant growth in SIP inflows and long-term holdings, these trends are expected to be crucial in supporting India's economic development in the forthcoming years.
Point of View
This could lead to a more robust economy. At NationPress, we believe this trend will empower a new generation of investors.
NationPress
11/12/2025
Frequently Asked Questions
What is the current mutual fund penetration in India?
As of now, mutual fund penetration in India stands at 10 percent.
What will mutual fund penetration be by 2035?
It is projected to double to 20 percent by 2035.
What factors are driving this growth?
The growth is driven by increased participation from smaller cities and a new generation of young investors.
How much will mutual fund assets under management grow?
They are expected to cross Rs 300 lakh crore by 2035.
What is the significance of this shift?
This shift indicates a major change in investment habits and a move towards long-term wealth creation.
