Mutual fund AUM logs over 20% growth for the third consecutive year

The mutual fund (MF) industry recorded over 20 per cent growth in assets under management (AUM) for the third consecutive financial year, even as equity markets delivered their weakest performance in six years.

 

Average industry AUM stood at ₹81.5 trillion in the March 2026 quarter (Q4FY26), up 21 per cent from ₹67 trillion in the same period last year.

 

Benchmark indices remained under pressure through 2025-26 (FY26). The Nifty 50 declined 5.1 per cent, while the Sensex fell 7.1 per cent — their worst showing since the pandemic-hit FY20. Broader markets were mixed; the Nifty Midcap 100 rose 1.9 per cent, whereas the Nifty Smallcap 100 slipped nearly 6 per cent. Overall market capitalisation remained largely flat at around ₹412 trillion, after retreating from a peak of about ₹481 trillion on January 2, 2026.

 

 

Despite the volatility, the strong AUM growth highlights the increasing resilience of the MF industry, which is seen as a key to market stability amid sustained selling by overseas investors.

 

Experts attribute this to sustained inflows through systematic investment plans (SIPs) and rising investor interest in non-equity schemes, which helped cushion the impact of weak equity returns.

 

"The encouraging part is that this growth has come despite market volatility, with investors largely staying put and SIP flows remaining intact. Incremental support has also come from segments like gold and silver exchange traded funds (ETFs)," said Jimmy Patel, managing director at Quantum MF.

 

Investor interest in gold and silver ETFs picked up steadily through FY26, as a strong rally in prices and impressive recent returns drew in a wave of new investors. Volatility in equity markets also pushed investors towards the two relatively lesser-known fund categories. The growing traction peaked in January, when combined inflows into the two segments surged to a record ₹33,500 crore.

 

Multi-asset funds, which invest across equity, debt and commodities, also witnessed a rise in investor interest. The category garnered ₹60,000 crore net inflows in the first 11 months of the year on the back of strong performance.

 

While inflows picked up in other categories, equity fund inflows lost some momentum last year. Inflows in FY26 stood at about ₹3 trillion till February, nearly 27 per cent lower than the FY25 tally, as choppy markets dented lump-sum investments and slowed new fund launches. However, SIP inflows, which continued to rise steadily, managed to off-set some impact of mark-to-market losses in the industry's AUM.

 

"The industry remains structurally well-positioned, with retail AUM providing greater stability during volatile periods, while institutional flows continue to be more cyclical and sensitive to market movements," Motilal Oswal Financial Services stated in a recent report on HDFC AMC.