The Indian mutual fund industry is riding an incredible wave. Equity MFs have witnessed a jaw-dropping 335% surge in assets under management (AUM) over the last five years, touching ₹33.32 lakh crore in July 2025, compared with just ₹7.65 lakh crore back in July 2020, according to fresh data from ICRA Analytics.
The Systematic Investment Plan (SIP) culture is a significant growth driver. For many Indians, SIPs aren’t just about investing—they’ve become a way to keep calm during market swings while benefiting from rupee cost averaging.
The massive turnaround in inflows tells its own story. In July 2020, equity MFs saw an outflow of ₹3,845 crore. Fast forward five years, and the scene has flipped, with inflows of ₹42,673 crore in July 2025.
On a year-on-year basis, that’s a 15.08% rise compared to July 2024 (₹37,082 crore). And compared with June 2025 inflows of ₹23,568 crore, this represents a whopping 81% jump month-on-month.
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Regarding the latest AMFI numbers, Ashwini Kumar, Senior VP & Head of Market Data at ICRA Analytics, said the sharp rise shows how Indian investors are becoming more patient.
“Investors are slowly embracing a long-term view. They understand that short-term market hiccups are part of the journey towards wealth creation. History tells us markets eventually bounce back and reward consistency,” he noted.
Kumar further said that despite shaky global cues, Indian investors remain upbeat about the country’s economic story. This optimism is reflected in strong MF inflows, even during bouts of volatility.
What also makes the case for equity MFs clear is their performance. Over the past three years, returns across all fund categories have stayed positive.
Small-cap funds topped the charts, giving 22.56% over three years and an impressive 31.70% over five years. Mid-cap funds weren’t far behind, with 22.20% returns in three years and 27.36% over five years.
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These numbers comfortably outshine traditional savings instruments like FDs or recurring deposits, drawing more retail participation.
While performance fuels inflows, Kumar reminded investors that large-scale exits and redemptions can swing markets in the short term.
In particular, mid and small cap segments are vulnerable to sudden inflows or pull-outs. Retail panic selling during volatility often shakes the system. But this is where SIP investors show resilience, providing a cushion,” he added.
According to ICRA Analytics, MFs now offer a wide basket of options, large-cap, balanced, thematic, and even sector-focused schemes—allowing investors to tailor portfolios based on risk and return preferences.
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