Mutual Fund Assets in India Projected to Cross ₹300 Lakh Crore by 2035
India’s mutual fund industry is poised for significant long-term expansion, with total assets under management (AUM) projected to exceed ₹300 lakh crore by 2035. According to a report by Bain & Company, this growth will be driven by increasing retail participation, rising digital adoption, and a steady shift in household savings toward market-linked investment instruments.
The report estimates that during this period, direct equity holdings are also expected to rise substantially, reaching approximately ₹250 lakh crore. Analysts attribute this trend to growing investor awareness, improved financial literacy, and easier access to investment platforms through digital channels.
Expanding Retail Participation
One of the most notable developments in the mutual fund sector is the rapid increase in retail investor participation. Over the next decade, the share of Indian households investing in mutual funds is expected to double—from 10 percent to 20 percent. This indicates a structural shift in savings behaviour, with more families moving away from traditional fixed-income instruments toward diversified market-based products.
The report highlights that millennials and Gen Z investors are playing a pivotal role in this transformation. Their comfort with digital platforms, combined with growing financial education, has made mutual funds more accessible and attractive to younger demographics.
Changing Investment Preferences
Data presented in the study shows a marked reallocation of investor portfolios toward equity and alternative investments. Between 2021–22 and 2023–24, the share of investor funds allocated to deposits and other low-risk alternatives declined by 93 percent, reflecting a strong preference for higher-return instruments.
At the same time, the number of mutual fund portfolios has grown rapidly. Over the past five years, the total number of portfolios has increased 2.5 times, demonstrating broad-based participation across income groups and regions.
Holdings of mutual funds for periods longer than five years have also risen sharply—from 7 percent to 16 percent—indicating greater confidence in long-term investing. During the same period, the share of Systematic Investment Plan (SIP) holdings increased from 12 percent to 21 percent, underscoring the growing popularity of disciplined, recurring investment strategies.
Rapid Growth in SIP Investments
SIP investments have emerged as a key driver of industry expansion. Over the past decade, the value of SIP contributions has grown at an average annual rate of 25 percent, making it one of the fastest-growing segments in India’s financial markets. This growth reflects rising income levels, improved financial planning, and a strong push by asset management companies to promote systematic, goal-based investing.
Demographic and Digital Transformation
The report notes a significant demographic shift in investor profiles. Investors with annual incomes below ₹30 lakh now account for 40 percent of total registered market participants, reflecting the democratization of capital markets. In terms of product adoption, 80 percent of equity investors and 35 percent of mutual fund investors are now digitally connected, highlighting the central role of online platforms in expanding market access.
Digital onboarding, mobile applications, and simplified investment processes have removed traditional barriers, enabling first-time investors from smaller towns and semi-urban regions to participate in financial markets.
Outlook for the Next Decade
Experts believe that sustained policy support, improved investor protection mechanisms, and continued digital innovation will further strengthen the mutual fund ecosystem. The projected rise to ₹300 lakh crore in assets by 2035 is expected to make mutual funds a cornerstone of household wealth creation in India.
With broader participation, long-term investment habits, and increasing trust in market-linked instruments, the mutual fund industry is positioned to play a central role in channeling domestic savings into productive capital. The transformation reflects not only financial growth but also a deeper shift in how Indian households plan, save, and invest for the future.
