Investors are consistently showing confidence in Equity Mutual Funds. AUM grew by 335% to ₹33 lakh crore in 5 years. Net investment in July 2025 was ₹42,673 crore. Investors have adopted a long-term perspective.
Mutual Fund Update: Investment in mutual funds is continuously increasing in India. Investor confidence is building on the progress of the domestic economy. Due to this confidence, there is a continuous inflow of money into equity mutual funds. According to ICRA Analytics data, the Assets Under Management (AUM) of equity mutual funds was ₹7.65 lakh crore in July 2020. Five years later, in July 2025, it increased to ₹33.32 lakh crore. This is a phenomenal growth of 335.31%.
Increasing Trend of Inflow and Investment
There has been a significant surge in mutual fund investments as well. An outflow of ₹3,845 crore was observed in July 2020. In contrast, a net investment (inflow) of ₹42,673 crore was recorded in July 2025. On a year-on-year (YoY) basis, this increased by 15.08%. The inflow also saw acceleration on a month-on-month (MoM) basis. Compared to ₹23,568 crore in June 2025, it rose by 81.06% to ₹42,673 crore in July.
Confidence of Domestic Investors
Ashwini Kumar, Senior Vice President at ICRA Analytics, stated that investors are now investing in mutual funds with a long-term perspective. They understand that short-term fluctuations are part of the wealth creation process. He said, "Despite global uncertainties, investors remain optimistic about India's economic progress. This confidence is reflected in the continuous inflow into equity mutual funds."
Schemes According to Different Risk Appetites
According to ICRA, mutual funds offer schemes catering to investors' varied risk appetites. These include large-cap, balanced funds, sectoral, and thematic funds. This provides investors with an opportunity to diversify their portfolios and manage risk.
Long-Term Perspective and Returns
Ashwini Kumar explained that past data also indicates that markets tend to recover over time. Patient investors can achieve good returns in the long run. The investor sentiment of not panicking from short-term fluctuations is increasing confidence in mutual funds.
Benefits of Investing in Mutual Funds
Mutual funds offer investors professional management, transparency, and the opportunity for regular returns. Investors in equity funds who invest for the long term can achieve good returns by capitalizing on market volatility. On the other hand, balanced funds and liquid funds offer the potential for safer investments.
Advice for Investors
ICRA experts advise investors to choose funds according to their risk appetite and invest with a long-term perspective. This will help investors remain unaffected by short-term fluctuations and achieve better wealth creation.
