India’s mutual fund market is changing beyond AUM growth. Financialisation is pushing more household savings into mutual funds, passive products are gaining share, and women are becoming a larger investor segment. Together, these trends are broadening participation, changing portfolio preferences and creating fresh room for the industry to expand.
India’s mutual fund industry is undergoing a structural shift as household savings increasingly move towards market-linked financial products. The share of mutual funds in the gross flow of annual household savings rose from 3% in 2020 to 13% in 2025,
While industry AUM more than doubled between March 2021 and March 2026, from 133 lakh Cr in 2021 to 225 lakh Cr in 2026. At the same time, passive funds have expanded rapidly, crossing ₹13.7 lakh Cr, and women have increased both their presence and asset share in mutual funds.
AMFI-Crisil Factbook 2026 shows that financialisation, passive investing and changing participation among women are becoming important drivers of this transformation.
Household savings are moving towards mutual funds
India’s large savings pool is increasingly being channelled into financial assets. The Factbook shows that the share of mutual funds in the gross flow of annual household savings increased from 3% in 2020 to 13% in 2025.
It shows the shift to higher risk appetite, the search for returns beyond deposits and small savings products, better market access, and financial participation in financial markets.
The expansion in mutual fund assets has also outpaced bank time deposits. MF AUM rose from ₹31.43 lakh Cr in March 2021 to ₹73.73 lakh Cr in March 2026, registering an 18.60% CAGR. Bank deposits, by comparison, grew 11.2% during the same period.
The Factbook links mutual fund growth to rapid digitalisation, higher financial literacy and increasing preference for SIPs.
The deeper penetration of mutual funds is visible in their AUM-to-GDP ratio. It increased from 15.9% in FY21 to 21.3% in FY26, supported by retail participation, robust inflows and rising SIP activity. However, the Factbook notes that India’s penetration remains below most developed and emerging markets, leaving considerable room for expansion.
Passive funds are moving from niche to mainstream
Passive fund AUM reached ₹13.73 lakh Cr in March 2026, growing at a 34.7% 5-year CAGR from March 2021. Their share of total industry AUM increased from 9.8% in FY21 to 18.6% in FY26.
The Factbook shows this expansion partly due to the low-cost nature of passive products and notes that India remains at an early stage compared with the US, where passive funds account for more than half of total fund industry assets.
ETFs excluding gold remained the largest segment, but their share declined from 89.2% in March 2021 to 65.1% in March 2026.
Meanwhile, index funds increased their share from 6.2% to 22.4%, with AUM reaching ₹3.07 lakh Cr and recording a 74.1% CAGR over 5 years.
Gold ETFs have also become a larger component of passive investing. Their AUM reached ₹1.71 lakh Cr, accounting for 12.5% of passive AUM in March 2026, with a 64.7% CAGR since March 2021. Passive funds attracted ₹2.07 lakh Cr of net inflows in FY26, four times the level in FY21.
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Women are becoming a larger part of the investor base
The other major structural change is the growing participation of women. Women accounted for 34.5% of individual investor AUM in March 2026, up from 32.6% in March 2021. Their AUM increased from ₹5.84 lakh Cr in March 21 to ₹15.88 lakh Cr in March 26, an absolute increase of ₹10.04 lakh Cr over 5 years.
In terms of investor numbers, women represented 26.4% of the mutual fund investor base in March 2026. That amounted to approximately 1.61 Cr women investors, out of a total investor base of around 6.09 Cr.
The participation is geographically broad but varies across states and union territories. Women’s contribution to individual investor AUM ranged from 16% to 40%. Mizoram and Orissa recorded the highest share at 40%, followed by Chandigarh, Maharashtra and Andaman and Nicobar Islands at 37%. Lakshadweep recorded the lowest at 16%.
Smaller cities are also gaining ground. B30 cities accounted for 26% of women’s AUM in March 2026, compared with 23% in March 2021. T30 cities still accounted for the majority at 74%, but the increase in the B30 share indicates a gradual broadening beyond India’s largest financial centres.
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Women are taking higher equity exposure
The growth in women’s AUM is accompanied by a change in portfolio composition. Equity-oriented schemes accounted for approximately 64% of women’s AUM in March 2026, compared with around 49% in March 2021. Debt allocation declined from approximately 24% to 8%, while hybrid schemes remained relatively stable at around 18–21%.
Age also plays a clear role in portfolio allocation. Equity accounted for 88.3% of AUM among women below 25, 76.2% among those aged 25–44, 64.8% among the 45–58 group and 51.2% among women above 58.
Older investors allocated more towards hybrid and debt funds, hybrid allocation reached 29.6% among women above 58, while debt allocation increased to 12%, compared with 2.1% among women below 25.
This creates a clear lifecycle pattern in women’s investing, with younger investors more heavily tilted towards equity and older investors allocating more towards relatively diversified and conservative categories.
SIPs are strengthening women’s participation
SIPs provide another indication of how women’s participation is evolving. Women’s SIP AUM increased from ₹1.26 lakh Cr in March 2021 to ₹4.73 lakh Cr in March 2026, nearly quadrupling over 5 years.
Women’s passive portfolios have simultaneously shifted towards index funds. Index funds accounted for 51.1% of women’s passive AUM in March 2026, compared with 20.3% in March 2021. Other ETFs accounted for 32.5%, while gold ETFs represented 16.4%.
Conclusion
India’s mutual fund market is expanding through more than just rising AUM. Household savings are increasingly being channelled towards mutual funds, passive products are taking a larger share of industry assets, and women are becoming a more significant source of both investors and capital.
The shift is visible in the numbers, MF AUM reached ₹73.73 lakh Cr, passive AUM reached ₹13.73 lakh Cr, and women’s AUM rose to ₹15.88 lakh Cr by March 2026.
