Gujarat's Equity Mutual Fund Growth Decelerates to Three-Year Low in 2025
In a significant development for the financial sector, Gujarat's equity mutual fund assets under management (AUM) recorded their slowest annual growth in three years during 2025. According to data released by the Association of Mutual Funds in India (AMFI), the equity AUM in the state increased by 16.1% year on year, reaching Rs 3.67 lakh crore by December 2025. This marks a sharp deceleration compared to the robust growth rates of 45.7% in 2024 and 39% in 2023.
Historical Context and Market Analysis
The last comparable slowdown was observed in 2022, when equity AUM grew by 16.6%. Market participants attribute this moderation to frequent market swings and global uncertainty, which have made investors cautious about deploying fresh lump sum capital. Key factors contributing to the volatility include geopolitical tensions, tariff-related disruptions, shifting interest rate expectations, and uneven corporate earnings throughout the year.
Insights from Financial Advisors
Mumukshu Desai, a financial advisor based in Ahmedabad, provided detailed insights into the current trends. "Monthly SIP and net inflow numbers remain intact and are growing at a routine pace of around 10–12%," Desai noted. "Equity markets are still below their 2024 peak, with large-, mid-, and even small-cap indices yet to fully recover, which is why AUM growth appears muted. SIP registrations, however, continue to rise month on month, reflecting investor conviction in the long-term equity story."
Desai further explained that investors have become more shrewd, preferring phased allocations during market corrections, with folio numbers growing in tandem. "We expect 20% growth in inflows once markets recover decisively from current levels, similar to the sharp rise seen in gold and silver allocations six months ago," he added. However, he pointed out that new first-time investors and fresh KYC registrations have slowed, indicating near-term caution among the public.
Diversification Trends and Future Outlook
Jayesh Vithalani, another Ahmedabad-based financial advisor, highlighted a shift in investor behavior. "Some of the investors also diversified into gold instead of equity given the high returns the precious metals delivered in the recent past," Vithalani explained. This trend underscores the broader market sentiment where investors are seeking safer havens amid uncertainty.
Financial advisors anticipate that equity AUM growth will remain measured in the near term, closely tracking market stability rather than momentum-driven inflows. Any sustained recovery in growth is expected to depend on greater clarity regarding global cues, earnings visibility, and the direction of interest rates. The overall outlook suggests a cautious but resilient approach from investors, with a focus on long-term strategies and diversified portfolios.
