Mutual Fund Industry Sees Record Growth in 2024, Surges Rs 17 Lakh Crore in Assets

The mutual fund industry has continued its upward trajectory in 2024, building on the remarkable growth of 2023.

With an impressive surge of Rs 17 lakh crore in assets, the sector is benefiting from a combination of buoyant equity markets, strong economic growth, and growing retail investor participation. Experts predict that the positive trend will continue into 2025.

According to Kaustubh Belapurkar, Director of Manager Research at Morningstar Investment Research India, "The mutual fund industry's assets are expected to continue growing at a healthy pace in 2025. With rising penetration among retail investors, flows into equity funds, particularly through Systematic Investment Plans (SIPs), are likely to remain robust."

Data from the Association of Mutual Fund Industry (Amfi) reveals that 2024 saw net inflows of Rs 9.14 lakh crore, alongside a significant increase of 5.6 crore in the investor count, with SIPs contributing Rs 2.4 lakh crore alone.

By November 2024, the industry’s assets under management (AUM) reached an all-time high of Rs 68 lakh crore, marking a 33% growth compared to Rs 50.78 lakh crore at the end of 2023. This growth far exceeded the 27% increase and Rs 11 lakh crore addition seen in 2023, continuing a pattern of consistent annual growth for the sector. Over the past four years, the mutual fund industry has collectively added Rs 30 lakh crore to its AUM.

The growth has been largely driven by equity schemes, particularly SIPs, which have seen consistent inflows. In 2024, the equity-oriented schemes alone received Rs 3.53 lakh crore in investments. Sectoral and thematic funds have also experienced a notable rise, with AUM growing by 79% to Rs 4.61 lakh crore, benefiting from a surge of Rs 1.4 lakh crore in inflows, including Rs 67,000 crore raised through 40 new fund offerings (NFOs).

Debt schemes, particularly liquid, ultra-short, and low-duration funds, saw robust inflows from institutional investors seeking short-term liquidity. Meanwhile, retail investors showed growing interest in gilt and dynamic duration funds, anticipating potential interest rate cuts in early 2025. Gold ETFs also gained popularity, with Rs 9,500 crore in inflows as investors sought safe-haven assets amid geopolitical and economic uncertainties.

The regulatory landscape has played a key role in fostering the sector’s growth, with initiatives like the MF Lite framework simplifying the process of setting up asset management companies and attracting new players into the market.

The introduction of the ‘Specified Investment Funds’ asset class has made boutique products more accessible to investors, with a reduced minimum ticket size of Rs 10 lakh.