Summary of this article
61 per cent of retail MF assets stay invested beyond two years
SIPs continue attracting strong inflows despite market volatility
Domestic investors now own more listed equities than FPIs
More than 61 per cent of retail mutual fund assets under management (AUM) remain invested for over 24 months, pointing to a growing preference among investors for long-term financial goals rather than short-term market opportunities, Sebi Whole-Time Member Amarjeet Singh said on July 3, 2026.
Speaking at ASSOCHAM's 17th Mutual Fund Summit, Singh said holding-period analysis showed an increasing long-term orientation among retail investors. "This is an encouraging sign that mutual funds are increasingly being used to pursue longer-term financial goals rather than short-term market opportunities."
Singh said the resilience of domestic investors, led by mutual funds, had become increasingly visible during periods of market volatility. Equity mutual funds recorded net inflows for 63 consecutive months through May 2026, covering the Covid recovery, the global monetary tightening cycle in 2022, episodes of foreign portfolio investor (FPI) outflows and heightened geopolitical uncertainty in early 2026.
Even during the market volatility seen in March 2026, domestic institutional investors (DIIs) invested nearly Rs 1.43 lakh crore in Indian equities, while equity mutual funds received inflows of more than Rs 40,000 crore, he said. "The Indian mutual fund industry has come of age as a shock absorber for our capital markets."
Systematic Investment Plans (SIPs) have been central to that resilience, Singh said. SIP inflows have averaged more than Rs 31,000 crore a month in the current financial year. As of May 30, 2026, there were more than 104 million SIP accounts with SIP assets exceeding Rs 17.1 lakh crore, reflecting wider acceptance of disciplined investing across market cycles.
DIIs have also strengthened their presence in the equity market. As of the March 2026 quarter, they owned 19.60 per cent of the NSE-listed universe, surpassing FPI ownership of 15.80 per cent, which Singh said was a 17-year low. Domestic mutual funds' shareholding reached a record 11.4 per cent.
The mutual fund industry's overall size has expanded sharply over the past decade. Industry AUM rose nearly sixfold from Rs 13.82 lakh crore in May 2016 to Rs 81.58 lakh crore at the end of May 2026. In the past five years alone, assets have almost tripled, while the ratio of mutual fund AUM to GDP crossed 21 per cent in March 2026, the highest on record, Singh said.
The investor base has widened as well. The number of unique mutual fund investors has increased from just over one crore a decade ago to more than six crore, with individual investors now accounting for close to two-thirds of total mutual fund AUM.
Singh said there was still considerable room for growth, noting that less than 5 per cent of India's population invests in mutual funds, compared with more than 50 per cent in the United States. He said the industry's future expansion would depend on reaching investors across regions, income groups and demographics. Sebi has introduced calibrated measures such as Beyond-30 location incentives, additional incentives for onboarding women investors and the Chhoti SIP framework to support responsible growth.
Referring to Sebi's recent regulatory initiatives, Singh said the regulator had introduced the framework for Specialised Investment Funds (SIFs), which had gathered more than Rs 13,500 crore in assets across over 56,000 investor folios by May-end. He also pointed to the recently introduced Life Cycle Funds, which gradually change their asset allocation as the target date approaches.
On investment behaviour, Singh cautioned investors against chasing popular themes. "Investment decisions need to be guided by financial goals, risk appetite and investment horizon, not by short-term trends that are currently in fashion."
He added that "In an environment where social media can amplify eye-catching returns and drive FOMO (fear of missing out), goal-based products such as life cycle funds can help investors remain focused on suitable asset allocation and long-term financial objectives."
Singh also said Sebi had proposed allowing third-party payments in limited cases, including employer-sponsored investments through salary deductions, distributor commissions paid in mutual fund units and charitable contributions through mutual funds, while retaining safeguards related to KYC, audit trails and anti-money laundering requirements.
Concluding his address, Singh said the mutual fund industry's progress should not be judged only by assets, folios or transaction volumes. "What matters ultimately is outcomes: better financial returns for investors, more productive allocation of household savings, and stronger governance in investee companies.
