Mutual Fund Share in Household Assets Jumps 125% in 10 Years, Rises from 4% in FY15 to 9% in FY25

According to a recent study ‘How India Invests’ by Bain & Company in partnership with Groww, India has witnessed a shift in the composition of household investments over the past 10 years. 

Mutual funds have doubled their share in household investable assets, reflecting a change in preferences from traditional savings like deposits and cash. 

Mutual Funds See 125% Growth in Share of Household Assets 

Between FY15 and FY25, mutual funds increased their share in household investable assets from 4% to 9%, a 125% growth. In contrast, the share of deposits and cash declined from 63% to 49%, revealing a move away from conventional saving instruments. This trend indicates wider adoption of financial market instruments among Indian households. 

At the same time, promoter-held direct equity rose from 22% to 29%, while non-promoter direct equity moved from 7% to 8%. The increase in promoter holdings suggests growth in entrepreneurial wealth, whereas the slight increase in non-promoter holdings shows limited direct retail participation. 

Limited Movement in Other Asset Classes 

Bonds maintained a static contribution of 4% to household assets during the period. The unchanged figure contrasts with the growing appeal of mutual funds, pointing to an opportunity for more innovation in debt-based investment products.  

Additionally, Alternative Investment Funds (AIFs) emerged at 1% of household assets in FY25, indicating interest from high-net-worth individuals. 

Diversification in Household Investment Approach 

The shift in asset allocation showcases changes in household risk-taking behaviour. Mutual funds appear to be the route through which many individuals now seek equity exposure without directly entering the stock market.  

The increased accessibility, along with tools like SIPs, could have contributed to this broad-based adoption. 

Read More: SEBI Revises Mutual Fund Expense Ratio Norms to Lower Investor Costs! 

Asset Class Comparison: FY15 vs FY25 

The study presents the following data for changes in asset composition: 

• Deposits and cash: dropped from 63% to 49% (−22.22%)
• Direct equity (promoter): increased from 22% to 29% (+31.82%)
• Direct equity (non-promoter): increased from 7% to 8% (+14.29%)
• Mutual funds: increased from 4% to 9% (+125%)
• Bonds: remained unchanged at 4%
• AIFs: newly added at 1% 

Conclusion 

The shift in preference from traditional instruments such as deposits and cash towards mutual funds highlights a broader financial evolution in household investments over the last decade. 

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.