Mumbai: Equity mutual funds in India have witnessed a sharp rise in assets under management (AUM), surging by 335.31 per cent to ₹33.32 lakh crore in July 2025, up from ₹7.65 lakh crore in July 2020, according to a report released on Friday by ICRA Analytics.
Despite bouts of market volatility, equity mutual funds continue to attract steady retail participation, with investors increasingly viewing them as a long-term tool for wealth creation.
Systematic Investment Plans (SIPs) remain a preferred strategy, helping investors counter volatility through rupee cost averaging — buying more units when prices are low and fewer when prices are high.
“Inflows into equity mutual funds have seen a significant jump in recent years, as investors are embracing a long-term approach and recognising that short-term market swings are part of the journey towards wealth creation,” said Ashwini Kumar, Senior Vice President and Head of Market Data at ICRA Analytics.
Sectoral and Small-Cap Funds Lead Inflows
Among categories, sectoral and thematic funds recorded the highest inflows at ₹9,426.03 crore in July 2025, reflecting growing investor appetite for new growth opportunities and alpha generation. Flexi-cap funds and small-cap funds followed, drawing inflows of ₹7,654.33 crore and ₹6,484.43 crore, respectively, as investors sought diversification and higher return potential.
Rising Inflows Year After Year
The report noted a remarkable turnaround in flows, moving from an outflow of ₹3,845 crore in July 2020 to inflows of ₹42,673 crore in July 2025. On a year-on-year basis, inflows grew 15.08 per cent from ₹37,082 crore in July 2024, while month-on-month, they jumped nearly 81.06 per cent from ₹23,568 crore in June 2025.
“Despite global uncertainties, domestic investors remain optimistic about India’s economic outlook. This confidence is reflected in the consistent inflows into equity mutual funds, even during periods of heightened volatility,” Kumar added.
With inputs from IANS