Mutual funds in India

• The total Assets Under Management (AUM) of the Indian mutual fund industry as of December 31, 2023, stood at a staggering ₹50.78 trillion (US$640 billion). This is a significant milestone, marking over a six-fold increase compared to the ₹8.26 trillion (US$100 billion) recorded in December 2013.[2]

• According to SEBI, during FY 2022–23, 73% of mutual fund units were redeemed within 2 years of investment. Only investments in 3% of the units continued for more than 5 years.[3][4]

• According to the Reserve Bank of India report, mutual funds attracted 6% of household savings in FY2023 and less than 1% went into direct equities.[5][6][7] Almost 95% of household savings in India park their money in bank deposits, including fixed deposit, provident fund, PPF, life insurance, and various small savings schemes.[8][9][10]

• According to the S&P SPIVA Report FY2022, over a 10-year period, approximate 68% of the large-cap actively managed funds failed to beat their respective benchmarks, and over 50% failed to beat their benchmarks in the mid- and small-cap segments.[11] Within the ELSS funds category, over 60% failed to beat their respective benchmarks over 10 year period.[11] Globally, over long periods of time, passively managed funds consistently outperform actively managed funds.[12][13][14]

• AUM of Equity funds – ₹20.33 lakh crore (US$250 billion) (November 2023)[15]
• AUM of Hybrid funds – ₹6.90 lakh crore (US$86 billion) (January 2024)[16]
• AUM of Debt funds – ₹11.97 trillion (US$150 billion) (March 2020)[17]

In April 2020, Franklin Templeton India unexpectedly wound up six credit funds with assets of close to $4 billion, citing a lack of liquidity amid the coronavirus pandemic. These funds had large exposure to higher-yielding, lower-rated credit securities. The Securities and Exchange Board of India (SEBI) conducted a probe into this sudden closure and found “serious lapses and violations”. As a result, in June 2021, SEBI barred Franklin Templeton Mutual Fund from launching any new debt schemes for two years. The regulator also ordered the fund house to refund investment and advisory fees, along with interest, of more than 5 billion rupees, and fined the global giant another 50 million rupees.[18][19][20][21]

Franklin Templeton said it strongly disagreed with the SEBI’s order and planned to appeal against it. The decision to wind up the schemes “was taken with the sole objective of preserving value for unitholders”, a spokesperson said. However, the closure of these funds sparked panic withdrawals from other Franklin Templeton schemes as well as credit funds of other asset managers, leading to a storm on social media and court cases by distraught investors.[21][18][20]

Despite being available in the market,[22] a recent report on Mutual Fund Investments in India published by research and analytics firm, Boston Analytics, suggests investors are holding back from putting their money into mutual funds due to their perceived high risk and a lack of information on how mutual funds work.[23] There are 46 Mutual Funds as of June 2013.[24] In 2019, Asset under management (AUM) of the mutual fund industry rose by 13% to 24 trillion in 2018 by November[25] The total assets under management (AUM) has surged by around 23.43% in 2023. The Assets base in January 2023 was Rs.40.70lakh crores, which rose to Rs.50.24 lakh crore in Nov, 23.[26]

Assets under management (AUM) is a financial term denoting the market value of all the funds being managed by a financial institution (a mutual fund, hedge fund, private equity firm, venture capital firm, or brokerage house) on behalf of its clients, investors, partners, depositors, etc.
The average assets under management of all mutual funds in India for the quarter Dec 2015 to Mar 2016(in ₹ Lakh) is given below:[27][28] or [29]

• Risk management
• Financial risk management
• 2020 stock market crash
• Satyam scandal
• Great Recession
• 2007–2008 financial crisis
• 2000 Dot-com bubble
• 1992 Indian stock market scam
• 401(k)
• Roth IRA
• Bombay Stock Exchange
• National Stock Exchange of India

• AUM Data
• S&P SPIVA® India Scorecard