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News Topical, Digital Desk : The penetration of mutual funds in India is expected to double from 10 per cent to over 20 per cent in the next 10 years. The assets under management (AUM) of mutual funds is expected to exceed Rs 300 lakh crore during this period, according to a report released on Tuesday. The
report "How India Invests 2025", released by Bain & Company in partnership with Groww, said that the next phase of growth in the industry will be driven by small towns and new young investors.
How much can equity holdings reach?
According to the report, the AUM of India's mutual fund industry is projected to surpass ₹300 lakh crore by 2035, with direct equity holdings expected to reach ₹250 lakh crore during this period. According to the report, the country's mutual fund ecosystem is rapidly developing, with many families turning to market-linked investing.
This will benefit from digital platforms, regulations, and growing investor confidence, who are increasingly relying on the market for wealth creation.
Which will be the important factor?
The report states that most of the new growth will come from large and affluent families living outside the top 30 cities. Many affluent investors in the 70 cities beyond the top 30 are also expected to adopt mutual funds more actively.
This growing participation is reflected in the rise of long-term investing. The share of holdings with a duration of more than five years in the industry's assets has more than doubled in recent years.
How is the SIP flow?
Saurabh Trehan, Partner and Head of Bain Financial Services in India, said that Indian households are gradually moving from a savings-based mindset to an investment-based approach. He further added that young and first-time investors – especially those living outside major metros – are playing a key role in strengthening the country's domestic investor base.
SIP flows and long-term holdings have increased rapidly, and these trends are expected to play a significant role in financing India's economic growth in the coming years.
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