Domestic Mutual Fund AUC Surpasses FII Holdings for the First Time in June 2026, Reaches ₹76.41 Lakh Crore

Domestic mutual funds have achieved a significant milestone in India's capital markets. According to The Economic Times, citing the latest NSDL data as of June 2026, the total assets under custody (AUC) of domestic mutual funds surpassed those of foreign institutional investors (FIIs) for the first time. 

The crossover reflects the growing participation of domestic investors, supported by sustained inflows into mutual funds, even as foreign investors have reduced their exposure to Indian equities. 

Domestic Mutual Fund AUC Overtakes FII Holdings 

The milestone follows nearly two years of strong domestic inflows into mutual funds, while FII holdings have moderated during the same period. 

FIIs Continue to Lead in Equity Assets 

Although mutual funds have overtaken FIIs in total assets under custody, foreign investors continue to hold a larger share of equity assets. 

FII equity holdings have declined from around ₹78 lakh crore in September 2024 to ₹68.65 lakh crore in June 2026, representing a decline of about 12%. 

During the same period, domestic mutual fund equity assets increased by 23.3%, rising from ₹44.20 lakh crore to ₹54.50 lakh crore. 

While FIIs continue to hold a larger equity portfolio, the gap between domestic mutual funds and foreign investors has narrowed significantly. 

Read More: Top International Mutual Funds Based on 5-Year SIP Returns: Edelweiss US Technology Equity FoF Leads 

Domestic Mutual Funds Increase Market Share 

The growing influence of domestic mutual funds is also reflected in their rising ownership of the Indian equity market.  

According to The Economic Times, citing PRIME Database data, domestic mutual funds' market ownership increased to 11.46% as of March 31, 2026, up from 11.10% as of December 31, 2025, marking the 11th consecutive quarter of an increase in market share. 

In contrast, FII ownership declined to 16.13%, a 14-year low, from 16.60% in the previous quarter. As a result, the gap between FII and domestic mutual fund ownership narrowed to 4.67 percentage points, compared with 9.34 percentage points as of December 31, 2023.  

The gap was significantly wider at 17.14 percentage points in March 2015, when FIIs held 20.70% of the market while domestic mutual funds accounted for 3.56%. 

Conclusion 

As of June 2026, domestic mutual fund assets under custody reached ₹76.41 lakh crore, marginally surpassing ₹76.22 lakh crore held by FIIs, according to NSDL data. 

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