Mutual Funds Outshine Stocks in Popularity, SEBI Survey 2025 Reveals

Backed by powerful campaigns, simplified digital onboarding, and strong retail participation, mutual funds have overtaken stocks in investor recall across India, according to the latest SEBI Investor Survey 2025.

Despite equities being traded in India for over a century—with the Bombay Stock Exchange (BSE) established in 1875 and the National Stock Exchange (NSE) in 1992—mutual funds have now become the most popular investment vehicle.

Mutual Funds Awareness Surpasses Stocks

The survey found that:

53% of respondents were aware of Mutual Funds (MFs) and Exchange-Traded Funds (ETFs)
49% recalled equities (stocks)
Awareness was much lower for other financial products: 13% for Futures & Options (F&O), 10% each for REITs/InvITs and corporate bonds, and just 6% for Alternative Investment Funds (AIFs).

This clearly shows that mutual funds—not stocks—are the top-of-mind investment product for Indian investors.

Growth Beyond Metros: B30 Cities Driving the Surge

One of the most striking findings is the rise of mutual fund assets from beyond the Top-30 (B30) cities.

B30 AUM stood at ₹14.14 lakh crore in August 2025, marking a 16% year-on-year growth.
Although assets dipped 0.4% compared to July, B30 cities contributed nearly 18% of the industry’s total AUM.
Equity mutual funds made up 76% of this share, confirming the rising appetite for stock-linked investments outside metros.

Regulators now see Tier-2 and Tier-3 cities as the next engine of growth for the Indian mutual fund industry.

The Journey of Mutual Funds in India

While equities have been around for over 100 years, the mutual fund industry is relatively young:

1963 – Unit Trust of India (UTI) launched the first mutual fund.
1993 – Private participation was allowed, boosting industry competition.
2017 onwards – The “Mutual Fund Sahi Hai” campaign became a game-changer, increasing retail participation through awareness and trust.
2020s – 100% digital onboarding and simplified KYC fueled mass adoption.

Explosive Industry Growth

According to AMFI:

Industry Assets Under Management (AUM) have skyrocketed from ₹8 lakh crore in 2014 to ₹75.19 lakh crore in August 2025.
Equity schemes dominate, followed by debt, hybrid, liquid, and passive funds.
Systematic Investment Plans (SIPs) are the backbone of mutual fund investing:
- Monthly SIP inflows hit ₹28,265 crore in August 2025.
- Total SIP AUM reached ₹15.18 lakh crore, over 20% of the industry’s total assets.
- Number of SIP accounts has grown from 1.5 crore in 2017 to 5 crore in 2025.

Expanding Investor Base: Women & First-Time Savers

SEBI and AMFI are working together to broaden participation:

Distributor incentives to attract investors from B30 cities.
Women-focused initiatives to encourage financial inclusion.
“Chhoti SIP” starting at just ₹250, launched in February 2025, making it easier for first-time savers to start investing.

Conclusion

The SEBI survey confirms a historic shift: mutual funds have overtaken stocks in popularity among Indian investors. With massive AUM growth, rising SIP adoption, and expansion into Tier-2 and Tier-3 cities, the mutual fund industry is set to remain a dominant force in India’s financial markets.

For individuals looking to start their investment journey, mutual funds offer simplicity, diversification, and long-term wealth creation potential.

If you want to learn how to analyze mutual funds, equity markets, and investment strategies, check out our Mutual Fund Training Course at ISFM – Best Stock Market School.