Children’s mutual fund AUM surge 142% to Rs 20,081.35 crore in May 2024, says ICRA Analytics [Read More]

Children’s mutual funds in India have seen a remarkable surge in Assets under Management (AUM), growing by nearly 142% over the past five years to reach Rs 20,081.35 crore in May 2024 from Rs 8,285.59 crore in May 2019, according to ICRA Analytics. Year-on-year, the AUM increased by almost 31% from Rs 15,375.40 crore in May 2023. \r

These funds have delivered impressive category average compound annual growth rates (CAGR) of 22.64%, 14.68%, and 12.71% over 1-year, 3-year, and 5-year periods respectively, outperforming traditional fixed deposits significantly. Ashwini Kumar from ICRA Analytics attributes the growth to rising education costs, prompting parents to seek disciplined investment options. \r

With a lock-in period of 5 years or more, children’s mutual funds encourage savings discipline and offer diversification across equity and debt to manage risk and optimize returns.