Evolving Investment Landscape: A Shift Towards Domestic Resilience

Over the past decade, India's investment landscape has witnessed a significant transformation. As traditional saving methods like bank deposits and physical assets lose their allure, equity-oriented mutual funds have gained prominence. This shift reflects the growing confidence of Indian households in the domestic economy and its resilience amidst global volatility.[EasyDNNnews:PaidContentStart]

Mutual fund assets under management (AUM) have seen impressive growth, increasing at a compound annual growth rate (CAGR) of 19.1 per cent in the last ten years, highlighting their importance in household portfolios. This shift is not merely driven by the desire for higher returns but also by the faith in India's ongoing structural reforms, digital financial inclusion, and sustained GDP growth.

When foreign institutional investors (FIIs) pull out, domestic investors step in to stabilise the markets. For instance, in August 2025, while FIIs withdrew nearly `46,903 crore, domestic institutional investors (DIIs) injected `94,829 crore, largely through mutual funds. This counterbalance has helped maintain market resilience, with mutual funds' shareholding in NSE-listed companies rising to 10.4 per cent by March 2025, up from 3.7 per cent in 2010.

Beyond the top-30 cities, smaller locations are also driving equity enthusiasm. The B30 cities contributed 18 per cent to industry assets by July 2025, with a notable 76.55 per cent invested in equity schemes. Direct investments from both retail and high-net-worth individuals (HNIs) underscore a shift towards self-reliance in investment decisions.

Despite mutual fund penetration still at a modest 19.9 per cent of GDP compared to 150 per cent in the US, there is immense potential for growth. This evolution signals strong domestic confidence in India's equity markets and highlights a path forward to further market maturity.

As we navigate future uncertainties, let us grow together— building on the foundation of a more resilient, informed, and self-reliant investment community

Shashikant Singh
Executive Editor

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