The mutual fund industry in India has set a scorching pace of growth over the past decade, taking its assets under management (AUM) to a record Rs 53.40 lakh crore in March 2024.

More importantly, the industry has provided Indian households avenues for wealth creation and enabled them to be a part of the country’s growth story.

In fiscal 2024, the mutual fund AUM accounted for an all-time high 18.2% of the gross domestic product. All that growth rides on deeper geographical penetration, led by expansion of distribution network, digital integration, improved financial literacy and an evolving investor mindset.

The AUM share of cities beyond the top 15 increased to ~35% in March 2024 from 25.4% in March 2019. The share of mutual funds in household savings also increased to 8.4% from 7.6% between March 2021 and March 2023.

Given a growing middle class and increasing disposable income, smaller cities are expected to play an increasingly bigger role in the industry’s growth in years ahead.

There has been a paradigm shift in investor behaviour. The ever-increasing monthly flows through systematic investment plans (SIPs) despite volatility in market returns are evidence that investors are giving increasing importance to a disciplined investing approach.