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Mumbai: India’s mutual fund industry reached a new milestone in September 2025, with total assets under management (AUM) climbing to an all-time high of ₹75.61 lakh crore, according to data from ICRA Analytics. The industry posted a 0.57% month-on-month growth over August, reflecting continued investor confidence despite contrasting fund flows between equity, gold, and debt segments.
Gold ETFs Emerge as the Star Performer
The standout story of September was undoubtedly Gold Exchange Traded Funds (ETFs). In a month marked by geopolitical tensions and global market uncertainty, investors rushed toward gold as a safe-haven asset.
Gold ETFs witnessed historic monthly inflows of ₹8,363 crore, representing an astonishing 578% jump year-on-year. This pushed their total AUM to ₹90,136 crore, up 24% month-on-month — more than doubling compared to September 2024.
Analysts attribute this surge to a mix of global and domestic factors — including rising gold prices, expectations of a US Federal Reserve rate cut, a weaker rupee, and heightened geopolitical risks. Investors, particularly retail participants, increasingly preferred gold-backed funds for portfolio diversification and protection against volatility.
Equity Mutual Funds Maintain Strong Momentum
While gold shone bright, equity mutual funds continued to be the engine of growth for the industry.
In September, net inflows into equity schemes hit ₹30,422 crore, underscoring sustained retail enthusiasm and confidence in India’s long-term growth story.
Equity AUM rose 1.8% month-on-month to reach ₹33.68 lakh crore, aided by buoyant markets and record participation through Systematic Investment Plans (SIPs).
SIP contributions scaled a fresh lifetime high of ₹29,361 crore, a 4% rise over August 2025, reinforcing the growing discipline among Indian retail investors. This steady inflow momentum highlights a structural shift toward goal-based investing, driven by digital platforms, fintech apps, and increasing awareness around wealth creation through equities.
Debt Funds Drag Overall Growth
Despite the positive momentum in equity and gold funds, the industry witnessed its steepest net outflows of the fiscal year, largely due to debt fund redemptions.
Debt funds saw withdrawals worth ₹1.02 lakh crore, as corporate treasuries and institutions pulled out funds to meet quarter-end liquidity needs and festive season expenses.
The liquid fund category was the hardest hit, facing outflows of ₹66,042 crore, while other short-duration debt funds also reported withdrawals.
However, overnight and dynamic bond funds managed to attract modest inflows, suggesting that investors remain selectively positioned amid changing interest rate expectations.
Meanwhile, hybrid funds witnessed inflows of ₹9,397 crore — though this marked a 39% drop month-on-month.
Passive funds, driven primarily by ETFs, saw net investments of ₹19,057 crore, reflecting a growing tilt toward low-cost, diversified instruments among investors.
Regional Trends: Tier-2 and Tier-3 Cities Fuel Growth
Mumbai continued to dominate India’s mutual fund landscape, commanding ₹20.54 lakh crore in AUM, or 27.6% of the total industry corpus.
However, the most encouraging development came from smaller cities. Regions like Delhi, Ahmedabad, and Jaipur posted rapid AUM expansion, while Tier-2 and Tier-3 locations now contribute 35% of total industry AUM, up from 24% in 2020.
This shift reflects deeper financial inclusion and growing awareness among new investors across India’s emerging markets. The total folio count touched a record high, with over 9.73 crore SIP accounts active as of September 2025 — a strong indicator of retail participation broadening beyond metros.
Industry Outlook: Diversification, Digitalisation, and Retail Dominance
According to ICRA Analytics, the mutual fund industry’s September performance underscores a structural transformation in India’s investment landscape.
Despite temporary outflows in debt segments, the retail-driven equity and passive fund momentum remains strong. Notably, individual investors now account for 61% of total AUM, a testament to India’s evolving savings culture and growing trust in regulated market instruments.
The continued rise of digital onboarding platforms, UPI-linked SIPs, and robo-advisory tools is also expanding access to mutual funds, especially in semi-urban and rural India. Analysts expect this digital and retail-driven growth to continue into 2026, supported by India’s resilient macroeconomic fundamentals and rising disposable incomes.
Bottom Line
India’s mutual fund industry continues to chart a robust growth path despite short-term challenges in debt categories. With equity and gold investments hitting record highs and retail participation deepening across geographies, the sector stands poised to remain a cornerstone of household wealth creation in the coming decade.
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#MutualFunds #AUM #GoldETF #SIP #EquityFunds #DebtFunds #IndianMarkets #ICRAAnalytics #FinancialGrowth #RetailInvestors #PassiveFunds #HybridFunds #DigitalFinance #InvestmentTrends #MarketUpdate #WealthCreation #InvestingInIndia
