Passive funds in India have witnessed strong growth momentum, with their combined assets under management (AUM) crossing ₹12 lakh crore in May 2025, according to AMFI data. This marks a significant rise in investor confidence towards cost-effective investment instruments.
The overall AUM of passive funds reached ₹12.11 lakh crore as of May 31, 2025, a 25% jump from ₹9.70 lakh crore recorded in May 2024. These funds now account for 16.78% of the total mutual fund AUM, which stands at ₹72.18 lakh crore.
Equity oriented ETFs dominated the passive segment with an average AUM of ₹6.98 lakh crore, representing 57% of passive AUM and 9.67% of the total mutual fund industry.
The equity index fund category, comprising 204 schemes, ranked second with ₹1.77 lakh crore in AUM. Target maturity index funds followed, holding ₹1.04 lakh crore across 97 schemes. Gold and silver ETFs also made notable contributions:
Other schemes included debt-oriented ETFs with ₹97,910 crore, and fund of funds investing overseas in active and passive schemes totalling around ₹26,414 crore.
In terms of flow data, passive funds experienced net inflows of ₹5,526 crore in May 2025. Key contributors to these inflows were:
Conversely, some categories saw outflows during the month, namely:
As of May 31, 2025, there were 629 passive fund schemes in total. The top categories by number of schemes were:
This growing product diversity underlines the increasing demand for building portfolios through index-based and low-cost instruments.
Though relatively smaller, international ETFs and index funds had a presence with ₹13,567 crore and ₹5,170 crore, respectively. Their flow data remained largely static in May 2025. Commodity-based ETFs like gold and silver continue to attract investors as alternatives in diversified portfolios.
The ₹12.11 lakh crore milestone showcases a shift in investor preference towards passives in India. Contributing factors include:
This trend indicates the increasing maturity of the Indian investment ecosystem, with more investors appreciating the value of diversification and the predictability of passive strategies.
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Measured as a portion of the entire mutual fund industry AUM of ₹72.18 lakh crore, here’s how key passive categories fare:
The consistent rise of equity ETFs makes them the core driver of willful passive adoption, particularly among institutional participants.
The surge in AUM to ₹12.11 lakh crore for passive funds as of May 2025 marks a significant growth milestone for the Indian mutual fund industry. With equity ETFs contributing the lion’s share, and net inflows staying strong, passives have become a substantial component of the total mutual fund landscape. The increase in schemes and flows signals a continued investor shift toward simpler and fee-efficient investment models.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/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 the related documents carefully before investing.
Published on: Jun 23, 2025, 2:17 PM IST
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