Mutual funds in India

Mutual funds are a way for people to invest their money together. They buy many different kinds of investments, like stocks and bonds. This helps spread out risk. If one investment does badly, others might do well.

The first mutual fund in India started in 1963. The Government of India created the Unit Trust of India. Since then, mutual funds have grown. They now include many types, such as equity funds, hybrid funds, and debt funds.

These funds let everyday people, including families and individuals, invest easily. Professionals manage the money. This makes it simpler for people to build their savings and plan for the future.

Structure

Mutual funds in India have a special setup to keep things safe for investors. They are organized as a Public Trust under the Indian Trusts Act, 1882 and watched over by the Securities and Exchange Board of India (SEBI). This helps make sure that the people who own the money and the people who manage it are separate, which keeps everyone’s money safe.

The main parts of this setup are three groups: Sponsors, Trustees, and the Asset Management Company (AMC). Sponsors start the mutual fund and put in money to help it begin. Trustees watch over the fund and make sure it follows the rules. The AMC handles the money, deciding where to invest it using experts called fund managers. There are also other helpers, like Custodians who keep the fund’s papers safe, and Registrars and Transfer Agents who handle records and deals for investors.

Mutual fund statistics

As of September 30, 2025, mutual funds in India managed ₹77.14 trillion (US$820 billion). This is much more than the ₹8.26 trillion (US$87 billion) in 2013.

In 2022–23, many people took their money out of mutual funds within two years. Only a small amount stayed in for more than five years. In 2023, mutual funds received about 6% of the money that families in India saved. Most savings went into bank accounts and other safe places.

Mutual fund category breakup

Mutual funds in India are split into three main types: equity funds, hybrid funds, and debt funds.

As of recent years, equity funds had large assets. Hybrid funds also had large assets. Debt funds held assets too.

Controversies

List of Mutual fund companies/schemes bankrupted, defaulted or closed

2020 Franklin Templeton Mutual Fund fiasco

In April 2020, Franklin Templeton India closed six of its funds because they had trouble getting money back during the coronavirus pandemic. The Securities and Exchange Board of India (SEBI) looked into this and found problems. SEBI stopped Franklin Templeton from starting new funds for two years and made them pay back money to investors.

Reliance Mutual Fund

In 2019, Reliance Mutual Fund had trouble getting money back because they had invested in companies that were having financial problems. This caused many people to want their money back at once, making it hard for the fund to meet those requests.

IL&FS crisis and impact

The IL&FS crisis in 2018 caused problems for many mutual funds. When IL&FS couldn’t pay back its debts, it made it hard for mutual funds to give people their money back without selling things for less than they were worth. This made people worry more about risks and led to new rules to help prevent this from happening again.

Amtek Auto Impact

Some mutual funds had trouble because they had invested in Amtek Auto, which couldn’t pay back its debts in 2015. This made it hard for those funds to give people their money back.

Birla Sun Life Mutual Fund (Aditya Birla Sun Life Mutual Fund)

In 2018, Aditya Birla Sun Life Mutual Fund had to deal with people wanting their money back because they had invested a lot in companies that were having financial problems.

Dewan Housing Finance Corporation (DHFL) crisis and impact

The DHFL crisis caused big problems for mutual funds because DHFL couldn’t pay back its debts. This made it hard for mutual funds to give people their money back without selling things for less than they were worth. This made people worry more about risks and led to new rules to help prevent this from happening again.

2001 UTI Mutual Fund (Unit Trust of India) fiasco

The Unit Trust of India had big problems in 2001 because many people wanted their money back at once, and there were issues with managing the money. The government stepped in to help protect investors and made changes to how the company worked.

DHFL Pramerica Mutual Fund

When DHFL couldn’t pay back its debts in 2019, it caused problems for mutual funds that had invested in DHFL. This led to a drop in the value of those investments and made it hard for the funds to give people their money back.

Yes Mutual Fund

In 2019, Yes Bank had big financial problems, which caused trouble for Yes Mutual Fund because they had invested in Yes Bank. This made it hard for the fund to give people their money back and affected how much money people got back.

Kotak Mutual Fund

In 2019, Kotak Mutual Fund had trouble giving people their money back because they had invested in companies that couldn’t pay back their debts. This led to delays and some people not getting all of their money back.

HDFC Mutual Fund

HDFC Mutual Fund had problems during 2018-2019 because of its investments in companies that couldn’t pay back their debts. This caused the value of some investments to go down and made people want their money back.

Sahara Mutual Fund

SEBI looked into Sahara Mutual Fund to see if they were following the rules. In 2015, SEBI said they had to close their funds because they weren’t following the rules, which made it hard for the company to operate and made people worry about their investments.

Market segment

Many people in India are careful about putting their money into mutual funds because they think these funds are risky and they don’t fully understand how they work. As of June 2013, there were 46 mutual funds in India. Over the years, the amount of money people have put into these funds has grown a lot. By November 2023, the total amount of money in mutual funds had increased by about 23.43% from the start of 2023.

Average assets under management

Assets under management (AUM) is the total value of all the money a financial company looks after for its customers. This includes money in mutual funds and other investments.

The average amount of money that all mutual funds in India looked after from December 2015 to March 2016 is shown below.

Mutual Fund Acquisitions