Equity Mutual Funds Soar to ₹4 Trillion in 2024; SIPs Drive Growth

Equity mutual funds saw a remarkable rise in inflows, nearly reaching ₹4 trillion in 2024, more than double the amount from the previous year. This surge indicates strong investor confidence and a growing shift toward long-term investing, especially through Systematic Investment Plans (SIPs).

2024: A Strong Year for Equity Mutual Funds

In 2024, equity and equity-oriented schemes saw inflows of ₹3.94 trillion, compared to ₹1.61 trillion in 2023, according to the Association of Mutual Funds in India (AMFI). This growth helped increase the assets under management (AUM) of the mutual fund industry by 40%, bringing it to ₹30.57 trillion by December 2024, up from ₹21.8 trillion the previous year.

The increase can be attributed to steady market performance, better financial literacy, and the growing popularity of SIPs, which encourage disciplined investing.

Thematic and Midcap Funds Lead the Growth

Thematic funds saw the highest inflows, with ₹1.55 trillion in 2024. Midcap and small-cap funds also experienced significant growth, attracting ₹32,465 crore and ₹34,223 crore, respectively. Large-cap funds received ₹19,415 crore. This widespread growth across various fund categories reflects strong investor optimism, especially in smaller and mid-sized companies that performed well in 2023 and 2024.

SIPs Play a Key Role in Fund Inflows

SIPs have become a crucial factor driving growth in the mutual fund sector, with total SIP contributions reaching ₹2.5 trillion in 2024. December saw a record high, with monthly SIP contributions peaking at ₹26,459 crore. This demonstrates the increasing appeal of long-term, regular investing.

Investor Participation Continues to Rise

Investor participation also increased, with the number of folios in equity funds rising by 4.45 crore to 15.75 crore by December 2024. This reflects the growing interest in equity mutual funds.

Over the past decade, the share of equity and equity mutual funds in household assets grew from 5.3% in March 2014 to 16.4% in September 2024. This shift shows a significant change in how Indian households manage their finances.

At the same time, the reliance on traditional savings instruments, like small savings schemes and deposits, has decreased. The share of deposits fell from 38.8% in March 2014 to 32.6% in September 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.