MF industry shows exuberance, but financials lag macroeconomic tailwinds

Over the past one, three, and five years, many Indian equity mutual funds have underperformed their benchmark indices

The mutual fund industry is experiencing an exuberant phase, with assets under management (AUM) surging to ₹65.7 trillion by March 2025 from ₹12.3 trillion in April 2014. This decade of strong growth has pushed AUMs to 31 per cent of bank deposits, bringing the industry closer to the financial sector’s high table. Yet, the asset management industry is a classic case where strong macroeconomic tailwinds have not necessarily translated into robust financials.

 

Why is the industry’s glass appearing half full? First, companies find it hard — but not impossible, to make money. An educated guess optimistically puts the industry profits