Retail participation in mutual funds surge from 26% in FY19 to 28% in FY25: 1Lattice Report

The retail participation in mutual funds increased from 26% in FY19 to 28% in FY25 and HNI participation also grew from 32% to 35%, showing rising trust across segments, according to a report from 1Lattice, a market intelligence firm.

The report further highlights that India’s mutual fund AUM hit Rs 65 trillion in FY25, growing at a 24% CAGR from FY20–FY25. The number of mutual fund folios jumped to 234 million, indicating widening retail participation.

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SIP contributions soared from Rs 0.4T in FY17 to Rs 2.9T in FY25, a 28% CAGR. Around 42% of 30 lakh new SIPs in Nov’23 were enabled by fintech platforms. Between Apr–Aug ’24, Tier-2 & Tier-3 cities added 1.2 crore new mutual fund investor accounts, with 54% of all SIP accounts now coming from B-30 cities.

Investing platforms like Groww, Paytm money, ET Money revolutionized mutual fund access with Rs 500 SIPs, digital onboarding, and mobile-first investing. Adoption of robo-advisors is also streamlining portfolio curation and making investment advice affordable and accessible, the report said

The equity-oriented AUM grew at a 28.7% CAGR (FY22–FY25), driven by bullish trends in small and midcap funds as these categories have delivered strong returns in FY25, encouraging investors to shift to equity-based investments.On the other hand, debt-oriented funds rebounded in FY25 with AUM reaching Rs 17T, showing stable investment preference. Despite equity dominance, debt MFs hold their ground, offering stability and predictable returns in uncertain rate environmentsHybrid funds provide equity’s growth potential with debt’s stability, helping investors mitigate risks. Even in flat markets, balanced advantage funds have maintained stable returns of 8-10% annually.

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AMCs such as SBI MF, ICICI Prudential MF, HDFC MF, and Nippon MF together account for nearly 50% of the total AAuM in FY25. “We have momentum on our side. Our product launches have been timely. Over the years, we’ve expanded our reach to newer corners of the country and bolstered our SIP book. Leveraging the parent SBI’s network, along with collaborations with other distributors, has been instrumental in our growth,” said Joint CEO, SBI Mutual Fund.