Mutual funds beat stocks in popularity, Sebi survey shows

Growth is no longer confined to metros. Assets from beyond the top-30 cities (B30) stood at Rs 14.14 lakh crore in August 2025, up 16% year-on-year. While they dipped 0.4% versus July, B30 assets contributed around 18% of industry AUM the previous month, with equities making up 76%. Regulators see smaller cities as the next engine of growth.

Mutual funds—not stocks—have emerged as the product with the most recall for Indian investors, a new Sebi survey has said.

The study showed that mutual funds (MFs) and exchange-traded funds (ETFs) have the highest awareness among market products, ahead of equities, and far ahead of other asset classes.

Given India’s long stock market history, with the Bombay Stock Exchange established in 1875, and the National Stock Exchange in 1992, the mutual funds industry is younger. The Unit Trust of India was set up in 1963, and the sector only took gained prominence after private participation was allowed in 1993.

The big shift came after the “Mutual Fund Sahi Hai” campaign, which, along with simplified KYC and 100% digital onboarding, turbocharged the industry’s popularity, market experts said.

Also Read: Sebi survey shows only 9.5% of Indian households invest in securities markets

The Sebi survey showed that 53% of respondents were aware of MFs/ETFs, compared with 49% for stocks. The awareness dropped sharply for other products, with 13% for futures & options, 10% each for REITs/InvITs and corporate bonds, and just 6% for alternative investment funds.

Sebi and other market participants including AMFI, NSE, BSE, NSDL and CDSL had commissioned the Investor Survey 2025, covering around 90,000 households across 400 cities and 1,000 villages in one of the largest surveys of its kind.

The dominance of mutual funds reflects the industry’s explosive growth. Assets Under Management (AUM) have surged from about Rs 8 lakh crore in 2014 to over Rs 75.19 lakh crore in August 2025, as per AMFI data. Equity schemes account for a large share, while debt, hybrid, liquid and passive funds too having expanded.

In August, equity mutual funds recorded net inflows of Rs 33,430 crore. Systematic Investment Plans (SIPs) remain the backbone of the sector, with monthly contributions hitting Rs 28,265 crore. Total SIP AUM now stands at Rs 15.18 lakh crore, just over 20% of industry assets, with five crore SIP accounts compared to 1.5 crore in 2017.

The growth of the MF business is now spreading beyond metros. Assets from beyond the Top-30 cities (B30) stood at Rs 14.14 lakh crore in August 2025, up 16% on-year. While they dipped 0.4% versus July, B30 contributed around 18% of industry AUM the month ago, with equities making up 76%. Regulators see smaller cities as the next engine of growth for mutual funds.

Sebi is backing that expansion with incentives for distributors to onboard new retail investors from B30 cities. A separate push for women investors and AMFI’s launch of the ‘Chhoti SIP’ of just Rs 250 in February 2025 aim to bring in first-time savers.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.