Indian mutual fund industry set to cross 50 million unique investors

The mutual fund industry in the country saw assets under management (AUM) surging to Rs 66.7 lakh crore in 2024 and is set to cross the 50-million unique investor base this year.

The stupendous growth is expected due to sustained buoyancy in the equity market and a surge in new fund offerings (NFOs).

According to industry experts, the investor count may reach 100 million by 2030, with Rs 100 trillion in total AUM. This surge will be fuelled by the market's resilience, strong retail participation, favourable market conditions, and diverse investment strategies.

The net AUM of the Indian mutual fund industry surged to cross Rs 65 lakh crore mark for the first time in August. Equity funds saw Rs 38,239 crore inflows in August, a 3.03 per cent growth from Rs 37,113 crore witnessed in July.

The systematic investment plans (SIPs) reached fresh highs as monthly contributions via SIPs hit Rs 23,547 crore in August, against Rs 23,332 crore in the previous month.

The growth comes as investors from smaller cities in India are embracing mutual funds like never before and the share of such investors in cities beyond the top 15 have risen significantly in the last four years.

While Mumbai and Delhi continue to hold their place with the most number of investors, accounting for 39 per cent investors as of June 2024, other cities have steadily contributed over 30 per cent of investors since March 2021, according to a Franklin Templeton report.

Experts say that inflows into mutual funds are a big source of liquidity for the equity markets as record SIP collection is absorbing any selling pressure.

SIPs continue to grow about 1 per cent every month which this is very healthy for long term growth of the industry and investors to increase their equity allocation in a disciplined way.