Equity mutual funds witnessed a remarkable surge in inflows to nearly Rs 4 lakh crore in 2024, more than double the amount recorded in the preceding year, reflecting strong investor confidence and a continued shift towards long-term investing, particularly through Systematic Investment Plans (SIPs).
Despite the strong performance in 2024, the outlook for 2025 appears cautious. The mutual fund industry has started to see a slowdown in equity fund flows since early December, a trend attributed to increased market volatility, Santosh Joseph, Co-founder and CEO of Germinate Investor Services, said.
Historically, inflows into equity funds are closely tied to market performance, and periods of market uncertainty often result in subdued investor activity.
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“As a result, 2025 may witness muted activity in terms of new fund launches and equity fund mobilization especially as market volatility persists,” Santosh Joseph, Co-founder and CEO of Germinate Investor Services, said.
However, long-term investors may continue to stay the course, benefiting from the wealth creation potential of equity markets when conditions stabilize, he added.
In 2024, the total inflow into equity and equity-oriented schemes stood at Rs 3.94 lakh crore, compared to Rs 1.61 lakh crore in 2023, according to data from the Association of Mutual Funds in India (AMFI).
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The impressive growth in inflows contributed to a 40 per cent increase in the assets under management (AUM) of the mutual fund industry, which reached Rs 30.57 lakh crore by December 2024, up from Rs 21.8 lakh crore in the previous year.
The growth has been largely attributed to consistent market performance, improved financial literacy, and the increasing adoption of SIPs, which offer a disciplined approach to investing.
Ganesh Mohan, CEO of Bajaj Finserv AMC, noted that retail investors are becoming increasingly aware of equities as a vital tool for wealth creation.
“The market’s consistent performance, along with the digitization of investment processes, has made equity mutual funds more accessible to investors, and the widespread use of SIPs has contributed to the inflow momentum,”
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