India Mutual Funds Market to Grow with a CAGR of 12.8% through 2030

India’s mutual fund market is experiencing significant growth, driven by increasing financial literacy, government reforms, and digitalization, despite challenges related to market volatility, rural adoption, and distribution costs.

According to TechSci Research report, “India Mutual Funds Market – By Region, Competition, Forecast & Opportunities, 2030F”, India Mutual Funds Market was valued at USD 769.58 Billion in 2024 and is expected to reach USD 1585.29 Billion by 2030 with a CAGR of 12.8% during the forecast period. India’s mutual funds market is poised for sustained growth, driven by various key factors and accompanied by certain challenges that need to be addressed. The rise in financial literacy, particularly among younger generations, is a primary contributor to the market's expansion. More people are shifting from traditional savings methods to investment vehicles like mutual funds to achieve better returns and long-term financial goals. The regulatory support provided by the Securities and Exchange Board of India (SEBI) has also strengthened the market’s infrastructure, ensuring transparency and protection for investors.

However, the market faces some challenges, especially regarding volatility in the stock market and risk aversion among investors. While equity-oriented mutual funds offer potentially high returns, their performance can be significantly affected by market fluctuations, which deter risk-averse investors. Additionally, despite improvements in financial literacy, rural areas still lag in mutual fund adoption, limiting overall market growth potential. Distribution costs and complex fee structures also remain an obstacle, particularly for new investors who may not fully understand the implications of these charges. Despite these challenges, India’s mutual fund market continues to thrive, thanks to trends such as digitalization and the rise of online platforms, which make investing in mutual funds easier and more accessible. The growing popularity of passive investing, with products like ETFs, and the shift toward ESG (environmental, social, governance) investing are shaping the market’s future. Hybrid funds are also gaining ground as investors seek a balanced approach to wealth generation, combining the benefits of both equity and debt instruments. With ongoing efforts to increase awareness, expand accessibility, and streamline costs, India’s mutual fund industry is expected to continue its upward trajectory.

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The India Mutual Funds market is segmented into scheme type, source of funds, region and companies.

Based on the scheme type, the fastest-growing segment in the mutual fund market is exchange-traded funds (ETFs). ETFs have gained popularity due to their low-cost structure, transparency, and ease of trading. Unlike traditional mutual funds, ETFs are traded on stock exchanges, providing investors with flexibility in terms of buying and selling. The growing interest in passive investment strategies has further propelled the growth of ETFs. As the Indian market continues to mature, it is expected that ETFs will play an increasingly prominent role, particularly among institutional investors who seek cost-effective exposure to broad market indices.

Based on the region, the Southern region is the fastest-growing region for mutual fund investments in India. Cities like Bengaluru, Chennai, and Hyderabad have witnessed a significant surge in mutual fund investments over recent years. This growth is driven by the rise in financial literacy, the increasing adoption of digital investment platforms, and the growing number of retail investors in tier II and tier III cities. The South has also seen considerable growth in the tech industry, with Bengaluru being a major IT hub, which has contributed to an increase in disposable incomes and an expanding middle class. The region has experienced a growing trend toward equity and hybrid funds, particularly among younger, tech-savvy investors who are more inclined to invest in mutual funds. Additionally, government initiatives aimed at enhancing financial inclusion, coupled with efforts to promote mutual fund investments in smaller cities, have made the Southern region an attractive market. The increased penetration of mobile internet and the availability of user-friendly digital platforms have further fuelled the growth of the mutual fund market in the South, making it the fastest-growing region. The region’s expanding investor base and increasing awareness of mutual funds are expected to continue driving rapid market growth in the coming years.

Major companies operating in India Mutual Funds market are:

• SBI Mutual Fund
• HDFC Mutual Fund
• ICICI Prudential Mutual Fund
• Reliance Mutual Fund
• Aditya Birla Sun Life Mutual Fund
• DSP BlackRock Mutual Fund
• Kotak Mutual Fund
•  IDFC Mutual Fund
• Tata Mutual Fund
• Invesco Mutual Fund

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“In recent years the trend of thematic investing is gaining momentum in India. Investors are increasingly interested in targeted mutual funds that focus on specific themes such as technology, healthcare, infrastructure, or green energy. Thematic funds allow investors to align their portfolios with their interests and long-term trends. This trend reflects the changing mindset of investors who are more focused on specific sectors or trends that they believe will perform well in the future. As India’s economy evolves and new sectors emerge, the demand for specialized mutual fund schemes is likely to increase“, Said Mr. Karan Chechi, Research Director of TechSci Research, a research-based management consulting firm.

"India Mutual Funds Market, By Scheme Type (Debt-oriented Schemes, Equity-oriented Schemes, Money Market, ETFs and FoFs), By Source of Funds ( Banks, Insurance Companies, Retail Investors, Indian Institutional Investors, FIIs and FPIs, Other), By Region, Competition, Forecast & Opportunities, 2020-2030F”, has evaluated the future growth potential of India Mutual Funds market and provides statistics & information on market size, structure and future market growth. The report intends to provide cutting-edge market intelligence and help decision makers take sound investment decisions. Besides, the report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the India Mutual Funds market.

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