India's Mutual Fund Industry Begins 2026 with Robust 20.5% AUM Growth
The Indian mutual fund industry has kicked off 2026 on a remarkably strong note, with total assets under management (AUM) climbing to Rs 81.01 lakh crore in January. This represents a substantial 20.5% increase from the Rs 67.25 lakh crore recorded in January 2025. Over the past 12 months alone, the industry has added more than Rs 13.8 lakh crore to its asset base, underscoring sustained investor confidence and market momentum.
Long-Term Growth Trajectory Remains Unwavering
The long-term growth trend for the mutual fund sector continues to be firmly intact. Industry AUM has expanded at an impressive compounded annual growth rate (CAGR) of 22% over the last five years. Looking back over the past decade that concluded in January 2026, the CAGR stands at a robust 20%, highlighting consistent and resilient expansion.
Equity-Oriented Schemes Anchor Expansion
Equity-oriented schemes have continued to be the primary driver of growth, accounting for a dominant 87% of individual investors' assets. The AUM of these schemes rose to Rs 58.02 lakh crore from Rs 48.13 lakh crore a year ago, marking a 20.6% year-on-year increase. Fixed income-oriented AUM also saw significant growth, climbing 20.2% to Rs 23 lakh crore.
Equity's share in the total industry assets stood at 59.8% in January 2026, remaining nearly stable compared to the 59.7% recorded a year earlier. Over the past year, equity AUM increased from approximately Rs 40.2 lakh crore to nearly Rs 48.5 lakh crore. Notably, equity net sales have remained positive for 59 consecutive months, with net sales excluding Systematic Investment Plans (SIPs) and new fund offers (NFOs) also staying in positive territory in January 2026, as per a recent report by Franklin Templeton.
SIP Inflows Maintain Strong Momentum
Systematic Investment Plan (SIP) inflows reached a new high of Rs 31,002 crore in January 2026, up 17% from Rs 26,400 crore in January 2025. Remarkably, monthly SIP flows have doubled in less than three years, reflecting growing retail participation.
SIP AUM rose to Rs 16.36 lakh crore, compared with Rs 13.20 lakh crore a year ago, reflecting 24% growth. SIP assets now account for 28.2% of total equity AUM, up from 27.4% last year. The total number of SIP accounts stood at 10.29 crore in January 2026, with 74.11 lakh new SIP accounts registered during the month—an all-time high.
Discontinued SIP accounts numbered 55.46 lakh, with discontinued SIPs as a percentage of registrations falling to 75% in January 2026 from 109% a year ago. The rise in discontinuations has been attributed to the reconciliation of inactive SIP accounts between RTAs and exchanges.
Over the last 12 months, aggregate SIP flows reached Rs 3.40 lakh crore, up from Rs 2.76 lakh crore in the previous year. Since FY17, aggregate SIP contributions have grown nearly seven times at a 24% CAGR. The average SIP ticket size increased to Rs 3,012 per month from Rs 2,571 a year earlier.
Investor Base Expands Significantly
The number of unique investor accounts rose to 6.02 crore in January 2026 from 5.33 crore a year ago, reflecting 12.8% growth. Around 12.14 lakh investors were added during January alone. Over the past year, 68 lakh new investors joined the fold, compared with 103 lakh in the same period last year.
Individuals accounted for 60% of total AUM, while institutions held 40%. Direct plans represented 49% of total AUM, up from 46% a year ago. Direct individual investments comprised 29% of total individual AUM, compared with 27% last year.
Passive Funds Achieve Record Levels
Passive fund AUM reached Rs 15.02 lakh crore in January 2026, up 38% from Rs 10.91 lakh crore a year earlier. Passive strategies now form 19% of total AUM, compared with 16% last year and 12% in January 2022.
Within passive funds, domestic equity passives accounted for 64.3% of passive AUM in January 2026, debt passives 13.3%, commodity passives 19.9%, international passives 2.2% and other index funds 0.3%.
Equity-oriented ETFs made up 79% of domestic equity passive AUM, with index funds comprising 21%. In debt passives, target maturity index funds accounted for 48%, debt-oriented ETFs 49% and other categories 3%, the report said.
NFO Flows and Category Trends
Aggregate NFO collections over the past year totalled Rs 65,100 crore. Equity funds contributed 61% of this amount, or Rs 39,433 crore. Among equity categories, flexi cap funds recorded the highest net sales over the last 12 months. Small cap, mid cap and large & mid cap funds also saw substantial inflows. Most equity categories posted positive net sales in January 2026.
Debt categories witnessed positive net flows during the month, led by money market-oriented funds. Total net sales across open-ended debt categories stood at Rs 74,827 crore in January. Hybrid schemes saw strong activity as well, with arbitrage funds recording the highest gross and net sales over the past year.
Mutual Funds Gain Ground Against Bank Deposits
Mutual fund AUM as a percentage of bank deposits rose to 32.6% in January 2026, up from 30.4% a year earlier. Over the past decade, this ratio has tripled. While mutual fund AUM has grown at a 22% CAGR over five years, bank deposits have expanded at 11% over the same period.
Geographic Diversification Continues
Geographically, assets continue to broaden beyond the largest cities. The share of B30 cities in industry AUM increased to 18% in January 2026 from 16% in December 2020, with B30 AUM growing at a 24% CAGR over five years compared with 20% for the top 30 cities.
Mumbai, Delhi and Bengaluru remained the top three contributors to industry AUM as of December 2025.
