Children's Mutual Funds AUM Surges 160% in 5 Years; SBI Magnum Children's Benefit Fund Delivered over 34% CAGR

Children's mutual funds in India have witnessed a significant rise in assets under management (AUM), growing by 160% over the past 5 years. This surge is largely attributed to the increasing costs of education, prompting families to seek market-linked investment options. 

Growth in Children's Mutual Funds 

As of November 2025, the AUM in children's mutual funds reached ₹25,675 crore, up from ₹9,866 crore in November 2020. The number of folios also increased from 29 lakh to 32 lakh during this period. These funds have become a popular choice for long-term education planning, offering returns that outpace traditional savings products. 

Top-performing schemes have delivered compound annual growth rates (CAGR) of 20-30% over 3 to 5 years. This performance has made them an attractive option for parents aiming to secure their children's education. 

Why Parents Prefer Children's Mutual Funds 

The rising costs of education, with private school fees increasing at 11-12% annually, have driven parents towards children's mutual funds.  

These funds offer a combination of equity for growth and debt for stability, with a mandatory 5-year lock-in period or until the child turns 18. This structure encourages disciplined savings. 

Read More: SBI, PPFAS Mutual Fund Among 5 AMCs with Over ₹10,000 Crore Cash in Portfolio in November! 

Top Performing Children's Mutual Funds 

Among the top-performing schemes, SBI Magnum Children's Benefit Fund - Investment Plan - Reg - Growth recorded a 5-year CAGR of 34.35%.  

Other notable funds include ICICI Prudential Children's Fund and HDFC Children's Fund, with 5-year CAGRs of 19.14% and 18.46%, respectively. 

Consistent Growth in AUM and Folios 

Data shows a steady rise in both AUM and the number of folios over the years. From November 2020 to November 2025, AUM grew from ₹9,866 crore to ₹25,675 crore, while folios increased from 29 lakh to 32 lakh. This trend highlights the growing acceptance of children's mutual funds as a viable investment option. 

Conclusion 

The significant growth in children's mutual funds' AUM over the past 5 years underscores their increasing popularity among Indian households. With rising education costs, these funds offer a compelling alternative to traditional savings products, providing higher returns and encouraging disciplined long-term savings. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.