FY24 has been a standout year for mutual funds (MFs) in India, with their assets under management (AUM) swelling by ₹14 lakh crore—a year-on-year growth of 35 percent—reaching a total of ₹53.4 lakh crore by the end of the fiscal year. This impressive growth has been driven by a combination of mark-to-market (MTM) gains and the overall expansion of the industry, according to the Economic Survey 2023-2024.
The number of folios, representing individual investor accounts, grew substantially from 14.6 crore at the end of FY23 to 17.8 crore by FY24. Despite the less favorable performance of income and debt-oriented schemes, all other categories of MF schemes saw net inflows. Notably, growth and equity-oriented schemes, along with hybrid schemes, contributed over 90 percent of the total net inflows, highlighting a strong preference among investors for these segments.
Exchange-traded funds (ETFs), excluding gold ETFs, also had a noteworthy year. These passive schemes saw a 37 percent increase in net assets in FY24, underscoring their growing popularity among investors looking for diversified and cost-effective investment options.
“A conducive economic environment in the form of lower interest rates, sustained post-COVID-19 recovery, elevated inflation, and a supportive policy backdrop also boosted the retail accumulation of capital market assets. Further, continuous investor awareness programs focusing on the rights and responsibilities of investors have contributed to the continuing growth of individual participation in securities markets,” according to the Economic Survey 2023-2024.
In the realm of systematic investment plans (SIPs), the MF industry has seen remarkable growth. Currently, around 8.4 crore SIP accounts are active, through which investors channel regular investments into various MF schemes. Annual net SIP inflows have doubled over the past three years, rising from ₹0.96 lakh crore in FY21 to ₹2 lakh crore in FY24. Consequently, the total SIP AUM now constitutes approximately 35 percent of the AUM of equity-oriented schemes within the MF industry.
This surge in SIP investments has significantly bolstered the mutual funds’ share in Indian equities, increasing ownership from 7.7 percent as of December 31, 2021, to 9.2 percent by the end of 2023. The burgeoning participation in MFs underscores growing investor confidence and a shift towards more structured investment avenues in India. With such robust growth, the future appears promising for the mutual funds industry, portraying it as a pivotal segment in the financial landscape.