 "Navneet Munot, managing director (MD) and chief executive officer (CEO), HDFC AMC")
The mutual fund (MF) industry’s growth journey and the deepening of retail penetration continued in 2025 despite equity market volatility, says Navneet Munot, managing director and chief executive officer at HDFC AMC. In an email interaction with Abhishek Kumar, Munot adds that MFs have evolved from being a niche investment product to becoming an integral part of household financial planning. Edited excerpts:
The SIP inflows into equity schemes remain buoyant, while lump-sum inflows have been comparatively lower in 2025 so far. What explains the divergent trend?
The divergence shows improved investor maturity. Systematic investment plan (SIP) is now a mainstream habit for millions of individual investors, a habit that the industry has managed to inculcate with persistent focus on investor education. SIPs address numerous behavioural biases which generally lead to suboptimal decisions, while also aiding investment discipline and rupee-cost averaging. The record inflows through SIPs in 2025 shows the durability of the habit.
Lump-sum flows, by contrast, are generally driven by sentiments and influenced by market narratives. It is likely that despite the muted returns this year, perception of expensiveness prevails in investors’ minds. Some investors seem to be waiting for a correction to deploy money. Despite that, lump-sum inflows are comparable to the 2024 tally when adjusted for new fund offering (NFO) inflows.
Apart from SIP inflows, the industry growth in 2025 has lagged in most other parameters like new investor additions. When do you expect the pace to pick up?
The retail participation has continued to deepen in 2025. Total MF folios have climbed to around 256 million, with over 4 million folios added in October 2025 alone, a scale that would have been unthinkable a few years ago. Equity-oriented categories now account for nearly 200 million folios, underscoring that MFs have become a part of household financial planning rather than a niche product. SIP flows, at roughly ₹29,000 crore in October 2025, remain one of the most stable engines of MF industry’s expansion. The number of unique investors too has increased from 52 million to 57 million in 2025 (as of October). At HDFC AMC, we have seen almost a doubling of unique investors in the last two years or so.
Gold and silver schemes have witnessed the highest asset and account growth over the past one year. Is it only driven by their performance or is there a structural shift from physical gold to MFs?
While the strong performance of gold and related schemes has naturally attracted investors, there is also a clear structural shift. Investors seem to increasingly prefer financialised forms of precious-metal exposure (Gold ETFs and gold funds) over physical jewellery for reasons of convenience, cost, purity, and portfolio transparency. Assets under management of gold ETFs recently crossed a notable milestone of ₹1 trillion with the net inflows into the category in the first 10 months of 2025 being higher than the combined inflows of the previous five years (2020-2024).
India is often highlighted as the world’s fastest-growing major economy. In your view, what are the strongest tailwinds driving this growth, and what are the most overlooked risks that could challenge India’s economic trajectory?
India’s demographic dividend, strong democratic framework and rapid digital adoption are powerful tailwinds driving its growth story. A young, growing population supports rising consumption while democratic institutions provide policy continuity and investor confidence. Recent policy reforms, such as the rationalisation of GST rates, have further improved the ease of doing business and could aid consumption in a significant way, especially against the backdrop of global headwinds. The proposed labour code reforms, in particular, aim to create a more flexible and formalised labour market which could boost productivity and employment generation over time. Consistent infrastructure investment further helps to strengthen the economy’s foundation, boosting connectivity and productivity across sectors. However, underappreciated risks including geopolitical tensions and global tariff uncertainty need to be monitored in the near term.
Sensex is completing 40 years. What larger story does this milestone narrate about the evolution of India’s economy over the last four decades?
Forty years of the Sensex is not just a story of index levels, it is a mirror to India’s economic transformation and the steady march of financialisation. The evolution of its composition reflects how the economy has shifted over time. In the early years, the index was dominated by industrials, automobiles, and capital goods, symbolising a manufacturing-led growth model. Liberalisation brought private banks into prominence, while the technology boom of the 2000s saw information technology (IT) companies take the centre stage. Today, the Sensex represents a mature, diversified economy with financial services at its core, supported by technology, consumer, energy, and industrial sectors. The inclusion of new-age businesses signals how India’s growth drivers are changing. Three qualitative shifts stand out. Capital markets have become deeper and more liquid, backed by stronger governance, disclosure norms and a broader investor base that now includes retail investors, foreign institutions, mutual funds, and family offices. Savings have been democratized as ownership of equities has expanded through SIPs to Tier-II and Tier-III India. Further, the earnings engine has moved from asset-heavy industries to intangible-driven sectors like financial services, software services, and consumer platforms, reshaping investor strategies.
For me, this milestone is not about celebrating numbers but about the idea that India has built an ecosystem where savings can be deployed productively and inclusively. Our role as asset managers is to ensure that this opportunity to participate in India’s growth story is taken to all households.
