Mumbai

As more Indians seek simple and transparent investment options, the number of retail folios in index funds surged nearly 12 times, rising from 4.95 lakh in March 2020 to 59.37 lakh by December 2023, according to a study by Zerodha Fund House. The assets under management (AUM) for these funds have also skyrocketed, growing 25 times from around ₹8,000 crore in March 2020 to approximately ₹2,13,500 crore in March this year.

Debt index funds have experienced significant growth as well, increasing from minimal AUM until March 2021 to nearly ₹1.1 lakh crore by March 2024. Vishal Jain, CEO of Zerodha Fund House, noted that nearly 11% of new folios in the past financial year were index funds, signaling a strong trend. The number of index funds has expanded dramatically, from 44 in March 2021 to 207 by March 2024, a growth of 370%.

By June 2024, index funds’ AUM reached a record ₹2.43 lakh crore, marking a nearly 900% increase over the past three years. This growth is the highest among all mutual fund categories. The Nifty 50 index dominates with 70.7% of the total AUM at ₹52,000 crore, highlighting a preference for large-cap stocks. The Nifty Next 50 holds 14.6% of the AUM at ₹10,000 crore, indicating a balanced approach to risk.