In recent years, the global macroeconomic environment has been characterized by persistent turbulence, and the capital markets have experienced significant volatility. This has led investors to increasingly focus on diversified asset allocation strategies. In response to this trend, Wind Fund has been dedicated to expanding overseas fund data and sharing in-depth research. In August 2024, Wind Fund published the first article in the Global Fund Insight series - "" which garnered widespread attention and acclaim.

In this article, we will focus on the Indian funds, delving into its development history and market characteristics. Future editions will also introduce observations on the Japanese market, with the aim of providing investors with more valuable and insightful analyses.

As the second-largest emerging economy after China, India has exhibited impressive growth over the past few decades. Over the past 20 years, the MSCI India Index has delivered an annualized return of approximately 8.31%, significantly outperforming the MSCI Emerging Markets Index (around 3.34%). This strong performance has firmly placed India in the global investment spotlight.

In tandem with the prolonged bull run in Indian equities, the Indian mutual fund industry has also experienced rapid expansion. By 2024, AUM had surpassed 60 trillion rupees (equivalent to about 5.62 trillion yuan), representing roughly 18% of the size of China's fund market. Given its significance, the Indian mutual fund market is now one of the key sectors covered by Wind Global Fund.

Source: Wind

Abstract

The history of Indian mutual funds dates back to 1964, when the Unit Trust of India (UTI) launched the country's first scheme. Since then, the industry has evolved through four distinct phases of development. Since 2014, the industry has seen rapid expansion, propelled by the regulatory framework established by the Securities and Exchange Board of India (SEBI) and the active involvement of fund distributors, particularly at the retail level. By 2024, the total assets under management reached 66.93 trillion rupees (about 5.62 trillion yuan).

The industry is highly concentrated, with the top 10 fund management companies holding 77% of the market share—significantly higher than the approximately 40% seen in China. Notably, 8 of these top firms are privately-owned entities. In terms of distribution, the majority of sales are conducted through agency channels and retail customer accounts make up a substantial 91% of the total.

Equity funds, Debt funds, and hybrid funds are the most prominent, accounting for 46%, 24%, and 13% of the total, respectively. In terms of fund holdings, the concentration is primarily in the Financial Services, Consumer Discretionary and Industrials.

Over the past year, FOFs overseas and ETFs tracking international indices have delivered the strongest performance. Among non-FOF products, mid-cap equity funds have shown the best performance, achieving an average return of around 16.41%.

Development History

Phase 1：1964-1987.The origins of the Indian fund industry can be traced back to 1964, when the Reserve Bank of India established the Unit Trust of India (UTI). At same year, UTI launched India's first fund product, the Unit Scheme. During this period, UTI gradually expanded its operations. By the end of 1988, the total AUM reached 67 billion rupees (approximately 16.7 billion yuan).

Phase 2：1987-1993. In 1987, other non-UTI public sector entities entered the market. These included mutual funds established by the State Bank of India, the Life Insurance Corporation of India, and the General Insurance Corporation of India. New fund products such as SBI Funds, Canbank Funds, and Punjab Funds were introduced. By the end of 1993, the total scale of Indian funds reached 470 billion rupees (approximately 86.9 billion yuan).

Phase 3：1993-2003. The entry of private sector companies marked a significant shift in 1993. Many foreign asset management companies established operations in India, offering investors a broader range of investment options. By the end of 2002, the number of fund companies had reached 33, with total AUM exceeding 1.2 trillion rupees (approximately 211 billion yuan), of which UTI managed over one-third.

Phase 4：2003-2014. The industry underwent a new round of consolidation following the split of UTI and the merger of several private fund companies. During this period, the global financial crisis erupted, and the fund industry as a whole entered a phase of slower growth.

Phase 5：2014 to present. To revitalize the fund industry, SEBI has been actively promoting a series of progressive measures since 2012. These efforts, combined with the proactive steps taken by fund distributors to expand their retail presence, have led to significant improvements in the fund industry.

In May 2014, the fund industry surpassed 10 trillion rupees for the first time, equivalent to approximately 1 trillion yuan, signaling the beginning of rapid growth. By August 2017, the industry had doubled its size to over 20 trillion rupees (about 2.06 trillion yuan). By November 2020, the industry had crossed the 30-trillion-rupee milestone (around 2.67 trillion yuan). Till the end of 2024, the industry had reach a net asset value of 66.93 trillion rupees (about 5.62 trillion yuan).

Market Overview

As of December 2024, the Indian fund market comprises 19,370 fund products, managed by 44 registered Asset Management Companies (AMCs). The total AUM across these funds amount to 66.93 trillion rupees, which is equivalent to approximately 5.62 trillion yuan.

The top 10 AMCs collectively manage approximately 52.83 trillion rupees (4 trillion yuan), representing around 77% of the total market share. This concentration is significantly higher than that observed in China (roughly 39.66%). These leading AMCs oversee a total of 12,759 funds, which constitutes about 65.87% of the overall fund products. The industry is highly concentrated, with the top three firms—SBI, ICICI Prudential, and HDFC—dominating the landscape.

The top ten AMCs are mainly from the Private Sector, with only two being Bank Sponsored. The details of each company are as follows:

Based on the purchasing methods preferred by investors, Indian funds currently offered two modes: Direct Plan and Regular Plan, each representing a distinct share class under the same scheme. Usually, investors can tell the difference by specific keywords in fund names, such as “reg” or “dir”.

Under Direct Plan, investors invest in mutual funds directly without involving or routing the investment through any distributor/agent. Under Regular Plan, people may choose to invest in mutual funds with the help of a Mutual Fund distributor/agent.

As of the average scale in December 2024, the Direct Plan shares account for approximately 46% which is slightly lower than the Regular Plan.

The Direct Plan typically excludes distributors or agents, resulting in a relatively lower expense ratio. Conversely, the Regular Plan involves intermediaries such as distributors and agents. Given that commissions are factored in, the overall expense ratio is higher than that of the Direct Plan.

Taking SBI (the largest AMC in India) as an example. The median total expense ratio(TER) under Direct Plan is approximately 0.465%, but it rises to 0.985% under Regular Plan, marking a difference of 0.52%. Among different categories, the Solution Oriented Funds and Equity funds have the highest TER under Regular Plan, and the difference (TER under Regular Plan minus TER under Direct Plan) is also the most significant, at 0.9% and 0.99% respectively.

From the perspective of investor distribution, retail investors hold an overwhelmingly dominant position. This trend has been bolstered by the Indian government's ongoing promotional policies and the widespread adoption of the SIP (Systematic Investment Plan) investment model, which has led to a continuous increase in the penetration rate of the Indian fund industry.

As of the end of September 2024, the number of retail accounts opened reached approximately 193 million, representing 91% of the total number of accounts. High Net Worth Individuals (HNIs) followed, accounting for around 8%.

In terms of investment scale, HNIs and corporate investors are the primary participants, holding 35.42% and 34.54% of the total, and the retail segment accounts for only 28.55%.

Categorization

Indian funds can be categorized into three types based on their organizational structures: Open-ended, Closed-ended, and Interval funds. Interval funds occupy a middle ground between Closed-ended and Open-ended funds, which allow purchases and redemptions during specified transaction periods (intervals).

As of the end of 2024, the Indian fund market is overwhelmingly dominated by Open-ended funds which comprises a total of 12,650 products and managed 66.66 trillion rupees (about 5.6 trillion yuan).

According to the classification rules published by SEBI, Indian funds can be further divided into five categories: equity schemes, debt schemes, hybrid schemes, solution-oriented schemes, and other schemes (including index funds, ETFs, and FOFs).

As of the end of 2024, the total AUM for equity schemes reached 23.53 trillion rupees (about 1.98 trillion yuan), representing around 45.75% of the total. Debt funds followed, with a managed scale of approximately 12.86 trillion rupees (about 1.08 trillion yuan), accounting for around 23.76%.

If further subdivided into secondary classifications, there are 12 subcategories under the equity schemes (such as large cap, large & mid cap, sectoral/ thematic, ELSS, etc.), 17 subcategories under the debt schemes (such as long duration, corporate bonds, credit risk, floating rate, etc.), 7 subcategories under the hybrid schemes (such as aggressive, conservative, multi asset allocation, etc.), 2 subcategories under the solution-oriented schemes (retirement funds and children's funds), and 4 subcategories under other schemes (such as index, ETF, FOF overseas, etc.). For detailed classification sections, please visit the [India Funds] section in the Wind Fund Data Explorer for further inquiries.

As of January 31, 2025, the top 10 largest funds in India are as follows:

Portfolios and Performance

According to the monthly portfolio statistics in December 2024, the main stock holdings of Indian funds are distributed in the Financial Services, Consumer Discretionary, Industrials, Healthcare and Information Technology.

The top two Indian stocks holdings are HDFC Bank and Industrial Credit Investment Bank of India (ICICI), both from the Financial Services sector, followed by Infosys Technologies and Reliance Industries.

Based on the latest benchmark statistics, the top five benchmark indices are as follows: the CRISIL Composite Bond Index (Composite Index), the CRISIL Medium Term Debt Index (Composite Index), the NIFTY 500 Total Return Index (Broad-based Index), the BSE 500 Total Return Index (Broad-based Index), and the CRISIL Liquid Debt A-I Index (Potential Risk Class Index).

The table below illustrates the annualized returns of various indices over the past five years. Notably, the overall returns of the two broad-based indices, Nifty 500 and BSE 500, significantly outperform those of other indices.

As of January 31, 2025, the details of the top 10 best-performing sub-categories are illustrated in the figure below. Over the past year, FOFs Overseas has achieved the highest average return, followed by FOFs Domestic. Excluding FOF schemes, mid cap funds and other equity schemes have performed well overall.

Among non-FOF categories, the top 10 funds with the best returns over the past year are listed below. The majority of these funds are ETFs that track overseas indices, including the Hang Seng Technology Index, NYSE FANG+ Index, Hang Seng Index, S&P 500 Index, Nasdaq Q-50, and Nasdaq 100 Index.

Since Q3 2024, India's two major indices have seen significant declines, mainly due to disappointing Q3 results from many listed companies, which led to a market valuation correction. Meanwhile, the recovery of China's stock market and global macroeconomic factors have caused substantial foreign capital outflows from India to China and other markets. This trend is also reflected in fund performance, with FOFs investing overseas showing higher returns over the past year.

As the top performer among emerging markets, the MSCI India Index has delivered an annualized return of approximately 8.31% over the past 20 years. This figure significantly outperforms both the MSCI ACWI (5.33%) and the MSCI Emerging Markets (3.34%), and is even slightly higher than the S&P 500 (8.16%). Consequently, the Indian market has consistently attracted the attention of global investors.

While this sharp correction has significantly impacted the Indian stock market, India retains substantial long-term investment advantages among emerging markets. Robust economic growth, demographic dividend, supportive policies, and the expanding consumer market will continue to drive the development of the India.

To help investors better seize investment opportunities, Wind Fund currently provides essential data, including basic fund details, NAVs, ETF quotes, fund documents, and portfolio holdings. These statistics offer investors a more comprehensive understanding of Indian funds and enable them to effectively track market trends. Looking ahead, Wind Fund is dedicated to improving data quality and optimizing the user experience, with the goal of becoming a powerful tool for investors' global asset allocation.

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公开募集证券投资基金风险揭示书

尊敬的投资者：

市场有风险，投资需谨慎。公开募集证券投资基金（以下简称“基金”）是一种长期投资工具，当您购买基金产品时，既可能享受基金投资所产生的收益，也可能承担基金投资所带来的损失。

您在做出投资决策之前，请详细阅读基金合同、基金招募说明书、风险揭示书等基金产品法律文件，熟悉基金的风险收益特征和基金特性，并根据自身的投资目的、投资经验、资产状况等因素评估自身风险承受能力，理性并谨慎做出投资决策。

根据有关法律法规，上海万得基金销售有限公司做出如下风险揭示：

一、基础设施基金与投资股票或债券的公募基金具有不同的风险收益特征且预期风险低于股票型基金，高于债券型基金、货币市场基金。投资者应充分了解基础设施基金投资风险及本招募说明书所披露的风险因素，审慎作出投资决定。

二、基金在投资运作过程中可能面临各种风险，既包括市场风险，也包括基金自身的管理风险、技术风险和合规风险等。

三、您应当充分了解基金定期定额投资和零存整取等储蓄方式的区别。定期定额投资是引导投资者进行长期投资、平均投资成本的一种简单易行的投资方式，但并不能规避基金投资所固有的风险，不能保证投资者获得收益，也不是替代储蓄的等效理财方式。

四、特殊类型产品风险揭示：

1. 如果您购买的产品为养老目标基金，该产品不保本，可能发生亏损。请您仔细阅读专门风险揭示书，确认了解产品特征。

2. 如果您购买的产品为货币市场基金，基金管理人不保证基金一定盈利，也不保证最低收益。

3. 如果您购买的产品投资于境外证券，除了需要承担与境内证券投资基金类似的市场波动风险等一般投资风险之外，基金还面临汇率风险等境外证券市场投资所面临的特别投资风险。

4. 如果您购买的产品以定期开放方式运作或者基金合同约定了基金份额最短持有期限，在封闭期或者最短持有期限内，您将面临因不能赎回或卖出基金份额而出现的流动性约束。

五、基金管理人承诺以诚实信用、勤勉尽责的原则管理和运用基金资产，但不保证基金一定盈利，也不保证最低收益。基金投资遵循“买者自负”的原则，在做出投资决策后，投资风险由您自行负担。

上海万得基金销售有限公司

免责声明：本文仅为信息参考之用，不构成任何投资建议。基金的过往业绩及其净值高低或基金管理人管理的其他基金的业绩并不预示其未来表现。万得基金及相关人员不承诺任何投资收益或投资本金不受损失。万得基金及相关人员对任何人因使用本文或其内容或者其他与之相关的原因引起的任何损失，以及因本文或其内容的发布，或者由于事实或分析数据传达中的错误而导致的直接或间接损失，不承担任何责任。本文所引用基金业绩表现数据来源于管理人披露的经托管人复核的信息，包括但不限于基金定期报告。