How Indians allocated investments in Gold ETFs, mutual fund SIPs in the first half of FY26
In a recent report by ICRA Analytics and Bain & Company, it was stated that the AUM of India's mutual fund industry is projected to surpass Rs 300 lakh crore by 2035, driven by increased retail participation, surging SIPs and deeper digital adoption.
Kolkata: The Indian mutual fund industry is on a roll despite wobbly equity markets in 2025. The AUM (assets under management) of the Indian mutual fund industry surged to Rs 80.8 lakh crore, recording 18.7% rise as at end-November 2025, mentions data in a Reserve Bank of India publication. The data further disaggregated the cumulative AUM into Rs 35.7 lakh crore in equity mutual fund schemes and Rs 45.1 lakh crore in non-equity schemes.
Relentless march of SIPs
It was also mentioned that SIP AUM has been rising on different counts. The AUM was seen rising as a share of the AUM of the domestic mutual fund industry at the rate of 54.4%, which is very high. The rise of the AUM as a share of the domestic mutual fund industry happened at the rate of 20.4% at the end of Nov 2025. The point that stood out from the above data is that there was consistently high demand for equities exposure among retail investors.
Slowdown in H1FY26 compared to earlier year
Overall, the equity markets in the H1FY25 period were far more buoyant than the market in H1FY26. As a result, equity-oriented mutual fund schemes witnessed a slowdown in net inflows in the first half of FY26 compared to the similar period of FY25. The inflows were 10.6% down in the first half of FY26 and that compared to the inflows in the first half of FY25.
Which funds got the highest inflows?
The RBI publication mentioned the highest inflows were witnessed in small-cap funds, mid-cap funds and flexi-cap funds. Thematic funds, which were a rage in 2024 witnessed moderating inflows compared to the previous period (Chart 1.40 a). On the other hand, cumulative net inflows into open-ended debt schemes rose 12.9% during the same period. Also among the debt funds money market and liquid funds recorded the highest inflows (Chart 1.40 b).
Inflow into ETFs flat
Inflow in to passive funds also slowed down. The rate of deceleration was 7.9% in H1FY26 compared to H1FY25. Significantly, the AUM remained steady at 17% of the total AUM of mutual funds (Chart 1.41 a). Inflows into ETFs and index funds were found to be flat or inched down. However, inflows into Gold ETFs did not slow down, thanks to the persistent surge in gold prices. Gold ETF inflow jumped 128% (y-o-y) to a record US$ 2.9 billion in 2025. The demand for physical gold also rose which was quantified at US$ 20 billion in value terms this year.
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