The increasing retail participation in mutual funds is evident from the rise in unique investors, doubling from 2.9 crore in FY21 to 5.6 crore by December 2024
Systematic Investment Plans (SIPs) have become a cornerstone of wealth creation in India, driving a surge in retail participation in mutual funds.
The Economic Survey 2024-25 released on Friday (January 31) said with over 10 crore SIP accounts and cumulative inflows crossing ₹10.9 lakh crore, the sustained growth of SIPs has played a crucial role in strengthening the mutual fund industry.
Record-high mutual fund ownership
Monthly average gross SIP flows have more than doubled in the past three years, rising from ₹0.10 lakh crore in FY22 to ₹0.23 lakh crore in FY25. These sustained inflows have contributed to a record-high mutual fund ownership in Indian listed companies, increasing to 9.5 per cent in the quarter ending September 2024, up from 8.7 per cent in FY24, the survey pointed out.
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This steady influx of investments, coupled with robust market performance, has propelled mutual funds’ assets under management (AUM) to ₹66.9 lakh crore as of December 2024, reflecting a 25.3 per cent rise since March 2024. As a result, mutual fund ownership in Indian listed companies has climbed to a record 9.5 per cent, underscoring the growing confidence of retail investors in market-linked wealth-building avenues, the survey said.
The report said the mutual fund industry has witnessed significant growth in recent years, playing a vital role in channelling financial savings into risk capital formation while leveraging technology and innovation. The increasing retail participation in mutual funds is evident from the rise in unique investors, doubling from 2.9 crore in FY21 to 5.6 crore by December 2024.
The Economic Survey said the total number of folios (excluding FoF domestic schemes) grew from 17.8 crore at the end of FY24 to 22.5 crore by December 2024. Retail investors now hold mutual fund units worth ₹18.6 lakh crore. This surge in participation, coupled with strong market performance, has propelled mutual funds’ assets under management (AUM) to ₹66.9 lakh crore as of December 2024, reflecting a 25.3 per cent increase since March 2024.