Kamal Ghorui
India’s mutual fund industry began 2026 on an optimistic note, with total assets under management (AUM) rising to Rs 81.01 lakh crore in January, up 20.5% from Rs 67.25 lakh crore a year earlier. Over the past 12 months alone, the industry has added more than Rs 13.8 lakh crore to its asset base.The long-term growth trend remains intact. Industry AUM has expanded at a compounded annual growth rate (CAGR) of 22% over five years and 20% over the past decade that ended in January 2026.
Equity-led expansion
Equity-oriented schemes continued to anchor growth, making 87% of individual investors assets. Their AUM rose to Rs 58.02 lakh crore from Rs 48.13 lakh crore a year ago, marking a 20.6% increase. Fixed income-oriented AUM also climbed 20.2% year-on-year to Rs 23 lakh crore.Equity’s share in total industry assets stood at 59.8% in January this year, hinging near the 59.7% recorded a year ago. Over the past year, equity AUM increased from around Rs 40.2 lakh crore to nearly Rs 48.5 lakh crore.Equity net sales have remained positive for 59 consecutive months. Net sales excluding SIPs and new fund offers (NFOs) also stayed in positive territory in January 2026 according to a recent report by Franklin Templeton.
SIPs continue momentum
Systematic Investment Plan (SIP) inflows reached Rs 31,002 crore in January 2026, up 17% from Rs 26,400 crore in January 2025. Meanwhile, monthly SIP flows have doubled in less than three years.SIP AUM rose to Rs 16.36 lakh crore, compared with Rs 13.20 lakh crore a year ago, reflecting 24% growth. SIP assets now account for 28.2% of total equity AUM, up from 27.4% last year.Total SIP accounts stood at 10.29 crore in January 2026. During the month, 74.11 lakh new SIP accounts were registered, an all-time high. Discontinued SIP accounts numbered 55.46 lakh, with discontinued SIPs as a percentage of registrations falling to 75% in January 2026 from 109% a year ago. The rise in discontinuations has been attributed to reconciliation of inactive SIP accounts between RTAs and exchanges.Over the last 12 months, aggregate SIP flows reached Rs 3.40 lakh crore, up from Rs 2.76 lakh crore in the previous year. Since FY17, aggregate SIP contributions have grown nearly seven times at a 24% CAGR. The average SIP ticket size increased to Rs 3,012 per month from Rs 2,571 a year earlier.
Investor base expands
The number of unique investor accounts rose to 6.02 crore in January 2026 from 5.33 crore a year ago, reflecting 12.8% growth. Around 12.14 lakh investors were added during January alone. Over the past year, 68 lakh new investors joined the fold, compared with 103 lakh in the same period last year.Individuals accounted for 60% of total AUM, while institutions held 40%. Direct plans represented 49% of total AUM, up from 46% a year ago. Direct individual investments comprised 29% of total individual AUM, compared with 27% last year.
Passive assets achieve record levels
Passive fund AUM reached Rs 15.02 lakh crore in January 2026, up 38% from Rs 10.91 lakh crore a year earlier. Passive strategies now form 19% of total AUM, compared with 16% last year and 12% in January 2022.Within passive funds, domestic equity passives accounted for 64.3% of passive AUM in January 2026, debt passives 13.3%, commodity passives 19.9%, international passives 2.2% and other index funds 0.3%.Equity-oriented ETFs made up 79% of domestic equity passive AUM, with index funds comprising 21%. In debt passives, target maturity index funds accounted for 48%, debt-oriented ETFs 49% and other categories 3%, the report said.
NFO flows and category trends
Aggregate NFO collections over the past year totalled Rs 65,100 crore. Equity funds contributed 61% of this amount, or Rs 39,433 crore. Among equity categories, flexi cap funds recorded the highest net sales over the last 12 months. Small cap, mid cap and large & mid cap funds also saw substantial inflows. Most equity categories posted positive net sales in January 2026.Debt categories witnessed positive net flows during the month, led by money market-oriented funds. Total net sales across open-ended debt categories stood at Rs 74,827 crore in January. Hybrid schemes saw strong activity as well, with arbitrage funds recording the highest gross and net sales over the past year.
Bank deposits on a rise
Mutual fund AUM as a percentage of bank deposits rose to 32.6% in January 2026, up from 30.4% a year earlier. Over the past decade, this ratio has tripled. While mutual fund AUM has grown at a 22% CAGR over five years, bank deposits have expanded at 11% over the same period.Geographically, assets continue to broaden beyond the largest cities. The share of B30 cities in industry AUM increased to 18% in January 2026 from 16% in December 2020, with B30 AUM growing at a 24% CAGR over five years compared with 20% for the top 30 cities.Mumbai, Delhi and Bengaluru remained the top three contributors to industry AUM as of December 2025.
