Retail investors have become the driving force behind the shift to direct investments in mutual funds, as their self-directed (DIY) assets have increased by more than fourfold over the past five years. Meanwhile, assets managed through regular plans have only doubled during the same period.
According to data from the Association of Mutual Funds in India (AMFI), the total retail Assets Under Management (AUM) grew from ₹1.6 trillion in March 2021 to nearly ₹7 trillion by March 2026. This significant growth in retail assets has led to a sharp increase in the share of direct investments over five years. By the end of March 2026, the share of direct plans in retail assets reached 36.7 percent, up from 21.4 percent in March 2021, as stated in the report.
The report, prepared jointly with CRISIL, notes that the preference for direct plans reflects a sustained expansion of self-directed investing, supported by improved digital access, increased product awareness, and growing cost sensitivity.
The share of direct plans has also risen among High Net-Worth Individuals (HNIs), although the growth rate here is not as high as among retail investors. The share of direct plans in HNI assets increased from 28.8 percent to 35.1 percent over the five-year period. In contrast, for corporate investors, the share of regular plans increased from 22 percent to almost 29 percent.
Investors can choose between direct and regular plans. Regular plans are distributed through intermediaries such as banks and agents and include fees for their services. Direct plans, however, do not require commissions and are intended for investors who are ready to manage the process themselves. These plans are available through the mutual fund companies' own websites and online platforms, such as Groww and Zerodha, which have played a key role in their expansion.
In recent years, the number of accounts opened on the direct side has surpassed those on regular plans. In the financial year 2026, direct mutual fund plans attracted 25.2 million net accounts, compared to 14.2 million on the regular side. This higher growth occurred despite an unfavorable stock market situation.
Experts attribute the larger inflow to the direct side to a surge in investor interest in Exchange Traded Funds (ETFs) and Gold and Silver Fund of Funds (FoFs). Gold and silver offerings from mutual funds demonstrated a sharp rise in fund inflows and portfolio additions in the second half of the financial year 2026.
Overall, direct plans accounted for 45.1 percent of the industry's total assets in March 2026, a slight increase from 43.4 percent in March 2021. This is partly because regular plans involve larger transaction sizes from private investors. The growth in the share of regular plans in institutional assets has also helped compensate for the sharp decline in the share of retail plans.
