India Passive Mutual Fund Assets Surge 324 Percent

Passive mutual funds in India experienced a significant surge in assets under management, growing 324 percent from Rs 3.57 lakh crore in July 2021 to Rs 15.15 lakh crore in July 2026. According to a report by ICRA Analytics Limited, this growth is part of a broader structural shift in investor allocation toward equity and passive products.

Total mutual fund assets under management rose 143 percent during this period, reaching Rs 85.76 lakh crore. While equity assets grew by 224 percent, debt assets increased by only 27 percent. The shift is further evidenced by folio growth, with passive fund folios increasing more than fivefold to 5.54 crore.

ICRA Analytics attributes the trend to investor preferences for cost-efficient, transparent, and diversified market exposure. The firm predicts that equity will remain the primary growth engine while passive products capture a larger share of incremental allocations.