MF investor growth slows to 5.2% in H1 2025 amid market volatility

Investor count rises 5.2% in H1 2025, a sharp slowdown from 12% in the same period last year, as equity market volatility and fewer NFOs weigh on mutual fund inflows

New investor additions by mutual funds (MFs) slowed substantially in the 2025 calendar year (CY), as the rise in equity market volatility somewhat dipped the appeal of equity schemes.

 

The unique MF investor count went up only 5.2 per cent in the first six months of 2025, compared to a nearly 12 per cent jump in the same period last year.

 

The total number of unique investors is mapped by the total permanent account number (PAN) registrations.

 

The industry had a total of 55.3 million unique investors as of June 2025, up from 52.6 million in December 2024.

 

The pace of investor additions, according to experts, is largely linked to the performance of the equity market.

 

“The key reason for the lower additions this year has been the weak equity market sentiments,” said Amit Bivalkar, founder director at Sapient Finserv.

 

“Several key factors explain this trend, the most important factor being market volatility and swift correction witnessed post September 2024. As on today, Nifty 500 is down about 2 per cent in the one-year period,” said Abhishek Dev, co-founder and CEO, Epsilon Money. 

 

Correction in the equity market during the six-month period ending in March 2025 impacted equity MFs' showing in the past returns' charts, especially the one-year performance. Equity schemes' strong showing on the returns chart across time frames has been among the key factors behind the surge in addition of new investors post 2020.

 

New fund offerings (NFOs), which are also a key driver of new investor additions, also saw a slowdown. In the first half (H1) of 2025, MFs have launched 25 active equity schemes compared to 30 in H1 2024. The NFO collections have dropped substantially from ₹37,885 crore to ₹10,690 crore in the same period.

 

While the downturn resulted in a decline in equity MF flows and new investor additions, participation from existing retail investors has remained strong. Systematic investment plan (SIP) inflows, which witnessed a marginal dip in January 2025, has been clocking new all-time-highs for the past three months.

 

The assets under management (AUM) linked to SIP accounts also rose to a new high of ₹15.3 trillion in June.

 

“Robust SIP inflows and continued strong participation from existing investors indicate that the underlying appeal of mutual funds remains intact for long-term savers, despite the recent moderation in new unique investor growth,” said Dev.