Mutual funds add 30 lakh folios in June 2025 to touch 24.13 Crore

MUTUAL FUNDS ADD 30 LAKH FOLIOS IN JUNE 2025

For the month of June 2025, a total of 30 Lakh new folios were added, taking the total folio count to 24.13 Crore. This is on top of the 20 Lakh folios already added in May 2025. In short, since the clean-up of defunct SIP folios was completed in April 2025, Indian mutual funds have already added 50 Lakh folios; indicating robust retail demand.

Folios added by mutual funds were 31 Lakhs in February, 22 Lakhs in March, 18 Lakhs in April, and 20 Lakhs in May 2025. In June 2025, the folio addition has bounced back to 30 Lakh folios. Over last 11 years, mutual fund folios have grown 6.11 times from 3.95 Crore to 24.13 Crore. We had seen earlier in May that SIP Stoppage has also mellowed down.

MF FOLIOS: MACRO PICTURE FOR JUNE 2025

Here is the macro picture of mutual fund folio growth for June 2025.

Data Source: AMFI

At a macro level, the total number of mutual fund folios as of June 2025 stood at 24.13 Crore; compared to 23.83 Crore in May, 23.63 Crore in April, and 23.45 Crore in March 2025. On a yoy basis, growth in total folios for June 2025 stood at 26.33%; compared to 28.15% in May, 30.21% in April, and 31.85% in March 2025. With inactive SIPs cleaned up, we should see a more reflective SIP stoppage ratio and a better Contributing SIP ratio.

ACTIVE DEBT FUND FOLIOS: MORE POSITIVE IN JUNE 2025

Debt fund folios have been under pressure for last couple of years; but there seems to be a turnaround since May 2025. Debt fund folios as of June 2025 grew +3.34%; compared to +0.89% in May, -1.15% in April, -3.00% in March, and -3.69% in February 2025. Overnight funds, credit risk funds, floater funds, and Banking & PSU Funds saw sharp contraction.

Data Source: AMFI

Of the 16 categories of debt funds, 12 categories showed positive growth in folios, with 5 of these  categories growing at over 10% yoy in June 2025 and 7 growing in over 5%. The leader in terms of folio growth was, Long Duration Funds at 45.21% yoy, followed by gilt funds at 22.28%. Overnight funds saw folio contraction of -23.17% and credit risk folios contracted -7.30% yoy. Folios picture of debt funds has clearly improved in June 2025.

ACTIVE EQUITY FUNDS ADD 3.51 CRORE FOLIOS YOY

In June 2025, active equity funds added 3.51 Crore Folios; compared to 3.71 Crore folios in May, 3.94 Crore folios in April, 4.10 Crore folios in March, and 4.23 Crore folios in February 2025. For active equity funds, the yoy folio expansion for June 2025 further tapered to 26.39%; compared to 28.80% in May, 31.39% in April, 33.38% in March, and 35.22% in February 2025. Rate of folio growth has progressively slowed at higher index levels.

Data Source: AMFI

In June 2025, all 11 active equity fund categories witnessed accretion in folios; but growth in folios was in single digits for focused funds and ELSS funds. The big boost to folio accretion in equity funds came from multi-cap funds 46.67%, mid-cap funds at 44.07%; followed by Sectoral / Thematic funds at 38.42%, and dividend yield funds at 26.21%. A total of 7 out of 11 equity fund categories saw folio accretion of over 25%. While the alpha hunting was dominant; it appears to have shifted from sectoral concentration to market cap spreading.

HYBRID FUNDS – ALLOCATION AND ARBITRAGE THE BIG STORIES

All the 8 Hybrid and solution funds showed yoy growth in folios; although 4 out of the 8 hybrid fund category funds only managed single-digit yoy growth in June 2025.

Data Source: AMFI

The 8 hybrid funds added 23.6 Lakh folios in last 1 year; with 4 out of these 8 reporting double-digit folio growth. The best folio growth was once again in multi asset allocation funds at 41.28%, followed by Arbitrage funds at 24.65%, Equity Savings Funds at 14.97%, and Balanced Advantage Funds (BAFs) at 13.13%. Asset allocation is now a powerful hybrid theme; and arbitrage funds are more as an alternative to liquid funds due to tax advantages. In June 2025, hybrid fund folios grew 11.81% yoy; compared to 11.93% in May, 12.09% in April, and 12.39% in March 2025. Hybrid funds are losing out on folio addition due to equity index levels; but power of allocation is still working the magic for them.

PASSIVE FUNDS ADDED 1.26 CRORE FOLIOS LAST YEAR

Net inflows into passive funds in June 2025 fell sharply once again, with flows into index ETFs being largely very subdued.

Data Source: AMFI

Fund of Funds (FOF) investing overseas saw contraction in folios for the tenth month in a row. Index funds dominated folio growth at 54.61%, followed by Gold ETFs at 41.48%, while index ETFs grew at a healthy 38.28% in June 2025. Passive fund folio growth in June 2025 stood at 41.44%; compared to 43.29% in May, 45.94% in April, and 48.31% in March 2025. Growth in passive folios may be gradually waning, but that is more due to the preference for active funds amidst a sharp equity market recovery.