India Passive Investing AUM to Hit ₹13.73 Lakh Cr by 2026
By Market Desk
India’s passive investing AUM is set to reach ₹13.73 lakh crore by March 2026, driven by strong inflows, diversification, and rising investor participation.
Passive fund assets under management (AUM) in India are projected to reach Rs 13.73 lakh crore by March 2026, demonstrating a significant 34.7% compound annual growth rate over five years. This robust expansion underscores a pivotal shift in investment strategies across the nation.
The surge in passive investing is primarily driven by strong net inflows into these funds. Additionally, increased product diversification, alongside heightened demand for both index funds and precious metal Exchange Traded Funds (ETFs), has fueled this substantial growth.
Investor Participation and Strategy Shifts
While institutional investors continue to dominate the passive investment landscape, there has been a notable expansion in individual investor participation. This growth is particularly evident among High Net Worth Individuals (HNIs), who are increasingly allocating capital to passive instruments.
A key trend observed is the longer duration for which investors are now holding passive investments. This indicates a strategic move towards more long-term portfolio allocations, reflecting growing confidence in the sustained performance of these vehicles.
Market Penetration and Future Outlook
Despite this boom, passive investing in India still exhibits lower penetration compared to more developed global markets, such as the United States. This suggests considerable untapped potential within the Indian market.
Future growth is expected to be further bolstered by upcoming regulatory initiatives. These measures are anticipated to provide additional impetus, facilitating broader adoption and deeper integration of passive investment strategies across India’s financial ecosystem.