Winning Bizness Desk
Mumbai.India's mutual fund industry continued to witness strong participation from retail investors during the financial year 2025-26, with equity schemes remaining the preferred investment choice. According to the Association of Mutual Funds in India (AMFI) Annual Report, the number of mutual fund folios climbed to 27.39 crore as on March 31, 2026, reflecting sustained investor confidence despite market fluctuations. During the financial year, nearly 3.94 crore new folios were added, highlighting the growing acceptance of mutual funds among individual investors across the country.
Growing retail participation lifts industry
The latest figures underline the steady expansion of the mutual fund industry over the past two financial years. In FY 2024-25, the total number of folios had increased from 17.79 crore to 23.45 crore, registering an impressive 32% growth. The continued addition of investors in FY2025-26 indicates that retail participation remains the key driver of the industry's expansion, with more households turning to mutual funds as a long-term wealth creation avenue.
Key highlights from the report:
- Total mutual fund folios reached 27.39 crore by March 31, 2026.
- Around 3.94 crore new folios were added during FY 2025-26.
- Retail investors continued to account for the bulk of new folio additions.
- Investor participation maintained its upward momentum throughout the year.
- Equity-oriented schemes held a 66.71% share of total folios.
- All open-ended fund categories registered growth.
- Equity funds continued to attract the largest number of investors.
- Closing AUM reached a record Rs 73.73 lakh crore.
- Annual AUM growth stood at 12.15%.
- AUM had touched an all-time high of around Rs 82 lakh crore in February 2026.
- Market volatility later led to a moderation before the financial year ended.
Equity funds continue to dominate preferences
Equity-oriented schemes remained the biggest contributor to overall folio growth during the year. According to the report, these schemes accounted for nearly 66.71% of all mutual fund folios, reinforcing their position as the preferred investment category among retail investors. AMFI also noted that every open-ended mutual fund category recorded growth in folio numbers during FY 2025-26, reflecting broader investor participation across different asset classes.
Performance across key fund categories:
Passive funds emerge as fastest-growing segment
While equity schemes dominated in terms of overall folio share, passive funds recorded the fastest pace of growth during the financial year. Folios in passive funds surged 38.13%, signalling a rising preference among investors for index-based and lower-cost investment products. Another notable trend was the stronger growth in active debt funds compared with active equity funds. Active debt fund folios grew 19.20%, comfortably ahead of the 11.54% increase recorded by active equity funds, indicating increasing diversification in investor portfolios.
Record assets despite market volatility
The mutual fund industry's Assets Under Management (AUM) also reached a new milestone by the end of FY2025-26. Total AUM stood at Rs 73.73 lakh crore in March 2026, up from Rs 65.74 lakh crore recorded at the end of March 2025. This represented an annual growth of 12.15%, underlining the industry's resilience despite bouts of market uncertainty.
Major AUM milestones:
Strong investor confidence stays intact
The report suggests that India's mutual fund industry continues to benefit from expanding retail participation, sustained inflows into equity-oriented products and growing interest in passive investment strategies. Although market volatility prevented assets from sustaining their February peak, the industry's ability to end the financial year with record AUM and significantly higher folio numbers reflects strengthening investor confidence and a widening adoption of mutual funds as an important investment vehicle.
