Blitz Bureau
NEW DELHI: India’s savings story is undergoing a quiet revolution, one that is as much cultural as it is financial. The country’s mutual fund industry has now crossed an astonishing Rs 75 lakh crore in assets under management (AUM), a milestone that would have been unthinkable even a decade ago. Yet the number itself, while impressive, only scratches the surface of what it represents: a decisive shift in the way Indian households view risk, reward, and long-term wealth creation.
For decades, the middle class swore by fixed deposits, real estate, and gold. These were considered safe, tangible assets, offering either assured returns or the psychological comfort of ownership. Markets, in contrast, were seen as speculative, the preserve of the bold, the lucky, or the well-advised. That mindset has changed dramatically in recent years. Today, mutual funds are no longer the choice of a small, urban elite. They are a mainstream savings vehicle, drawing in investors from tier-2 and tier-3 towns and symbolising a generational embrace of risk-taking.
The scale of this transformation is best captured by the surge in systematic investment plans (SIPs). Monthly inflows now exceed Rs 23,000 crore, a figure that speaks not only to the breadth of participation but also to the discipline with which investors are approaching wealth creation. The regularity of SIPs reflects a cultural shift away from one-time, lump-sum investments toward structured, long-term financial planning.
No longer averse to taking risks, investors move beyond safe havens to mutual funds; cross Rs 75k crore mark
What is striking is where this money is going. Large-cap funds remain popular, but mid- and small-cap categories — once considered too volatile — are drawing unprecedented interest. The appetite for higher risk is clear: investors are no longer shying away from volatility, provided the long-term story is compelling.
The other striking trend is the rising dominance of individual investors. The industry, once driven by institutions, is now decisively retail. Franklin Templeton India Mutual Fund notes that over 61 per cent of assets under management are now held by individual investors. That number is telling: it demonstrates both confidence and conviction among households to bypass traditional asset classes in favour of market-linked products.
Parallel to this has been the extraordinary rise of passive investing. Over the past five years, folios in passive funds have grown 17-fold, riding on the back of exchange-traded funds (ETFs) and index funds. Passive products appeal not just because of their low costs but also because they simplify investing for first-timers.
The appeal of passive funds is philosophical as well as financial. Hemen Bhatia of Angel One AMC explains: “Passive investing captures the full potential of the market itself. As India’s GDP grows, its companies innovate, and its middle class expands, broad market indices will continue to reflect this progress. Passive investors naturally benefit from this growth trajectory without the need to forecast which sectors or stocks will lead the next rally.” In other words, passive investing allows Indians to align directly with the country’s growth story.
This optimism is not confined to fund houses. Analysts too see a structural shift in savings behaviour. The low-cost structure and accessibility that makes these funds especially attractive for India’s expanding retail base.
Underlying this transformation is a broader confidence in markets, politics, and regulation. The mutual fund industry has benefited from regulatory reforms, better transparency, and the credibility of platforms such as SIPs and digital onboarding.
If mutual funds are emerging as the new cornerstone of savings, it is partly because the alternatives are losing their sheen. Real estate, once the default asset class for surplus income, has been hit by high prices, low rental yields, and sluggish secondary sales. It is increasingly viewed as illiquid and cumbersome. Gold, while still a favored hedge, has lost some of its lustre as a primary investment, particularly for younger households who prize liquidity and digital accessibility over storage and inheritance value. Fixed deposits, long the bedrock of middle-class savings, are now seen as inadequate in the face of inflation and rising aspirations.
Digital platforms have accelerated this change. Mobile apps and online brokerages have made investing seamless, transparent, and less intimidating. The ease of starting an SIP, tracking a portfolio, or switching between schemes has opened the door for millions of first-time investors. What was once the preserve of a financial advisor is now literally at one’s fingertips.
The Rs. 75 lakh crore milestone is therefore not just a statistical landmark but a cultural one. It marks a decisive break with the past, where wealth was measured in land and gold, and a leap into a future where financial products are seen as the true engines of prosperity. It reflects the willingness of a new middle class to embrace risk, trust the markets, and build wealth with discipline rather than speculation.