India’s Mutual Fund AAUM Sees Strong Yearly Growth Despite March Pullback

According to ICRA Analytics, the Indian mutual fund industry’s average assets under management (AAUM) surged 21.32% year-on-year in March 2025. This marks a strong annual expansion, demonstrating robust investor interest and asset accumulation in the mutual fund space. However, a month-on-month decline of 1.25% from February 2025 was observed, indicating a short-term contraction across several categories.

Equity-Oriented Funds Maintain Dominance

Equity-oriented growth schemes continued to hold the largest share of the industry’s AAUM at 53.72%. These were followed by debt-oriented schemes with a 15.06% share and liquid schemes at 13.21%. Despite the broad-based monthly decline, these core segments continue to represent the structural backbone of the mutual fund ecosystem.

ETFs Buck the Trend with Positive Momentum

While most scheme categories witnessed a dip in March, Gold ETFs and Other ETFs registered significant monthly gains. Gold ETFs rose by 89.88%, and Other ETFs increased by 15.06%, showcasing selective investor preference amidst broader market caution. This outperformance could reflect asset reallocation strategies in light of evolving market sentiment.

Regional Distribution Highlights Concentration

Geographically, Maharashtra accounted for the largest share of AAUM at 40.64%, followed by New Delhi, Gujarat, Karnataka, and West Bengal. Together, these 5 states contributed over 65% of the industry’s total AAUM, underscoring a regional concentration in fund mobilisation.

Smaller States and UTs Show Varied Trends

Among union territories and smaller states, Lakshadweep had the highest equity-oriented AAUM share at 91.98%, with Andhra Pradesh following at 81.50%. Sikkim stood out for the highest monthly growth in AAUM at 5.19%, while Gujarat and West Bengal recorded the steepest declines of over 2%.

On a yearly basis, Lakshadweep again topped the charts with a remarkable 71.61% surge in AAUM. In contrast, Goa posted the slowest annual growth at 15.51%. Despite the monthly moderation, all regions reported positive year-on-year growth.

Read More: Mutual Fund AUM Surge: Top Fund Houses of CY 2024. 

Equity Inflows Lose Steam

A notable trend in March was the significant slowdown in net inflows into equity mutual funds. Total inflows dropped to ₹25,000 crore—the lowest in a year—compared to ₹29,000 crore in February and a high of ₹42,000 crore in October 2024. Thematic and sectoral funds bore the brunt of this slowdown, with inflows plummeting to ₹170 crore in March from a high of ₹22,400 crore in June 2024.

Conclusion

Despite a slight dip in March, the mutual fund industry’s annual growth reflects sustained investor confidence and expanding market participation.

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