MF investor additions hit slow lane in 2025 as equity volatility bites

Industry adds 5.8 million investors this year compared to 10.6 million in 2024

The pace of new investor additions by mutual funds (MFs) fell in 2025 as the equity market correction and a rise in volatility dimmed the appeal of equity schemes.

 

MFs added 5.8 million new investors in 2025 (as of November 30), sharply lower than the record 10.6 million additions in 2024. But this year’s figure is higher than the 5.3 million added in 2023.

 

In percentage terms, however, investor growth in 2025 is likely to be the weakest in five years.

 

The number of unique MF investors has risen by about 11 per cent so far this year and is unlikely to surpass the 15 per cent growth recorded in 2023. 

 

The total number of unique investors is mapped by the total permanent account number (PAN) registrations. At the end of November 2025, the industry had 58.4 million unique investors.

 

According to experts, the decline in new investor additions in recent months is largely due to the volatility in the equity market.

 

“The volatility in the stock markets since September 2024 has hurt the pace of accretion of new investors. The near-term performances of equity schemes, especially smallcap and midcap funds, have taken a hit. Even largecap funds have delivered only high single-digit returns,” said Sunil Subramaniam, a former MF executive and founder & chief executive officer (CEO) of Sense and Simplicity.

 

The correction followed by a range-bound market has impacted equity MFs' showing in the past returns' charts, especially the one-year performance.

 

New fund offerings (NFOs), which are also a key driver of new investor additions, have also witnessed a decline in investor interest this year.

 

The industry has raised ₹63,631 crore through 222 NFOs in 2025 (as of November), sharply lower than the nearly ₹1.2 trillion collected via 239 launches in 2024.

 

However, the subdued equity market sentiment hardly had any impact on the flow of investments from existing investors, especially through systematic investment plans (SIPs).

 

SIP inflows crossed ₹3 trillion for the first time in a calendar year in 2025.

 

“Retail participation has continued to deepen in 2025. Total MF folios have climbed to around 256 million, with over 4 million folios added in October 2025 alone. This is a scale that would have been unthinkable a few years ago. Equity-oriented categories now account for nearly 200 million folios, underscoring that MFs have become a part of household financial planning rather than a niche product,” said Navneet Munot, managing director (MD) and CEO at HDFC AMC.