'The volatility in the stock markets since September 2024 has hurt the pace of accretion of new investors.'
Rediff explains why the system, not the Budget, is the problem.
The MF investor count, which stood at around 38 million in April 2023, has surged by 19 per cent in the past year.
Net mutual fund inflows into active equity schemes in India plummeted by 40 per cent month-on-month in May, reaching a one-year low of 22,908 crore, primarily due to weaker lump-sum investments and increased redemptions amidst significant market volatility and global uncertainties.
New investor additions by mutual funds (MFs) have slowed dramatically in recent months, indicating that market correction and a rise in volatility are somewhat dimming the appeal of equity schemes. MFs have onboarded 300,000 new investors in April 2025, the lowest in 22 months.
Net investments into equity mutual fund schemes in India remained elevated at approximately 38,440 crore in April, despite a slight dip from March's high and a 3% month-on-month decline in Systematic Investment Plan (SIP) inflows.
Net inflows into equity mutual fund schemes moderated in FY26, falling by 27 per cent to about 3 trillion till February, as choppy markets and global uncertainties prompted investors to shift towards safer options like hybrid funds and gold ETFs.
The number of active SIP accounts is nearing the 100 million milestone.
Uncertainty stemming from the US-Iran conflict has significantly impacted India's mutual fund industry, leading to a sharp decline in new fund offers (NFOs) in March, despite numerous regulatory approvals. This geopolitical tension, coupled with existing market strain and distributor hesitation, has dampened investor sentiment and affected overall inflows.
The SIF vertical, which allows MFs to offer complex products to relatively sophisticated investors, has managed to garner scale in just seven months of the launch of the first products.
Adopting overly aggressive strategies without considering risk could lead to significant losses during the next downturn.
Mutual fund investors no longer need to link their PAN with Aadhaar to obtain 'KYC-registered' status.
Investments under the framework would remain voluntary for employees.
Analysts are increasingly optimistic about India's capital markets, with HDFC AMC, CAMS, and KFin Technologies identified as top investment picks. This optimism stems from a structural shift in household savings towards financial instruments and an expected multi-year earnings expansion for market infrastructure providers and asset management companies.
Despite the Reserve Bank of India's (RBI) and the government's recent initiatives to attract foreign capital, which are expected to alleviate pressure on long-duration bonds, most debt fund managers are maintaining a cautious stance, favouring shorter-duration papers due to global uncertainties and potential future rate hikes.
Hybrid mutual fund schemes attracted significant inflows of Rs 1.55 lakh crore in FY26, a 29 per cent increase, as investors increasingly opted for diversified investment strategies to navigate volatile market conditions and geopolitical tensions.
MF investors may not be able to support markets fall if selling intensifies
India's market regulator, Sebi, has approved the re-introduction of open-market share buybacks through stock exchanges, effective August 1, 2026, alongside easing debt listing norms for RBI-regulated entities and simplifying rules for mutual funds and alternative investment funds.
Equity flows have been under pressure since the second half of 2018, after the IL&FS crisis sent shockwaves in both equity and debt markets.
Global financial institutions, including Goldman Sachs and Citigroup, have invested Rs 963 crore in One 97 Communications (Paytm's parent company) through open market transactions, acquiring a 1.34 per cent stake from SAIF Partners and Elevation Capital.
2025 marked a shift in investor preference when it comes to MF schemes.
rediffGURU Ulhas Joshi answers your mutual fund queries.
In front-running case, some fund houses have settled with Sebi and paid the amount lost to trustees.
Direct plans of mutual fund schemes added nearly 21 million individual investor folios in FY26 (as of February), surpassing regular plans' 15 million net additions, marking only the second time direct plans have outpaced regular plans in annual folio growth, despite turbulent equity markets.
The Securities and Exchange Board of India (Sebi) on Wednesday overhauled the cost framework for the 80 trillion domestic mutual fund (MF) industry, introducing a simplified structure aimed at improving transparency for investors while balancing the impact on asset managers.
Ask rediffGURU and PF, MF and insurance expert Purshotam Lal your mutual fund, insurance and personal finance-related questions.
Sensex and Nifty post steepest weekly loss in over a year, falling nearly 3 per cent.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
India's mutual fund industry has significantly increased its share of public trading in the stock market, widening its lead over the Life Insurance Corporation of India (LIC) for the fifth consecutive year. While LIC's share of free-float listed shares has fallen to 7.42% as of March 2026, the mutual fund industry's share has surged to 22.92% from 7.06% in 2012.
'The net inflows into MF schemes may also have been lower last month, with investors booking profit and taking a more measured approach amid elevated valuations.'
Inflows into mutual fund (MF) schemes via systematic investment plans (SIPs) have topped Rs 3 trillion for the first time in a calendar year, as investors increasingly rely on the staggered investment route amid market volatility.
A significant majority (57%) of India's investment advisors are concentrated in just five metro cities, leading to concerns about financial inclusion and the spread of financial market products beyond urban centres, according to a Business Standard analysis of Sebi data.
Passive funds have resumed gaining ground in the mutual fund (MF) industry after a slowdown in 2024, with their share of assets under management (AUM) reaching an all-time high in 2025. The surge has been driven largely by robust inflows into gold and silver exchange-traded funds (ETFs).
The competitive intensity in the mutual fund (MF) industry is moving beyond scheme performance, cost structures, and distribution. In recent months, several fund houses have rationalised exit loads applicable on redemptions.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
'Multi-asset funds have cornered 30 per cent of hybrid fund inflows in 2025, reflecting a growing preference for diversified portfolios that combine equity, debt and commodities.'
rediffGURU Jinal Mehta answers readers' financial planning and health insurance queries
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
'In my entire career, whenever friends, relatives, or associates have sought my counsel, I have told them consistently: Stay away from equities. Buy gold. Place funds in fixed deposits. Acquire some raw land.' 'That is all one genuinely needs to build meaningful, enduring wealth, without the attendant anxiety of equity market participation.'
The highlight in January, with no surprise, has been flows into gold and silver ETFs.
