SECTORS PREFERRED BY MUTUAL FUNDS IN JUNE 2025?
Which were the most preferred sectors for mutual funds in June 2025? A one-month perspective gives a very short term view, but we still look at MOM growth in MF AUM sector-wise. In absolute terms; Banking, Retail, Pharmaceuticals, Chemicals, and Consumer Durables were the most preferred sectors. In terms of MOM percentage change; Retail, Consumer Durables, Chemicals, Aviation, and Ratings were the most preferred.
There is another perspective. In this analysis, we look at MF equity holdings overall (including equity holdings in hybrid and passive funds). As of June 2025, active equity fund AUM was ₹33.47 Trillion. However, overall equity holdings of Indian MFs was ₹47.11 Trillion. That means, ₹13.64 Trillion (29.0%) of MF equity holdings was accounted for by hybrid and index funds.
SECTORS WITH MF EXPOSURE ABOVE ₹1 TRILLION
The overall equity AUM of all mutual funds stood at ₹47.11 Trillion in June; compared to ₹44.89 Trillion in May, and ₹42.64 Trillion in April 2025. This AUM is 21.8% higher than the AUM of ₹38.67 Trillion in the year ago period.
| Sectors | June 2024 | March 2025 | May 2025 | June 2025 |
| Banking & Finance | 10,90,007 | 12,05,703 | 13,22,518 | 13,82,296 |
| IT-Services | 3,43,435 | 3,83,320 | 4,02,732 | 4,14,601 |
| Auto & Auto Ancillaries | 3,83,835 | 3,60,320 | 4,03,985 | 4,09,116 |
| Pharmaceuticals | 2,98,513 | 3,56,689 | 3,70,308 | 3,89,967 |
| Oil & Gas | 2,47,401 | 2,45,019 | 2,71,112 | 2,82,364 |
| FMCG | 1,91,220 | 2,06,629 | 2,21,263 | 2,23,326 |
| Capital Goods | 1,57,689 | 1,39,859 | 1,69,301 | 1,80,130 |
| Retail | 91,417 | 1,27,904 | 1,46,227 | 1,73,222 |
| Telecom | 1,20,708 | 1,33,072 | 1,47,437 | 1,57,740 |
| Chemicals & Fertilisers | 99,663 | 1,11,909 | 1,26,712 | 1,45,119 |
| Metals & Mining | 1,30,820 | 1,32,945 | 1,37,846 | 1,42,608 |
| Power | 1,19,883 | 1,27,678 | 1,29,056 | 1,35,841 |
| Infrastructure | 1,21,632 | 1,21,139 | 1,31,414 | 1,33,484 |
| Consumer Durables | 88,651 | 85,357 | 88,611 | 1,01,576 |
Data Source: AMFI, MF Websites (₹ in Crore)
These top 14, with AUM above ₹1 Trillion account for 90.7% of total equity AUM of Indian mutual funds. The list almost matches with the most heavyweight sectors on the index, which is not surprising. However, what is interesting is that among the most preferred stocks by mutual funds in terms of exposure, there are some interesting sectors like retail and chemicals; which look more like a deliberate alpha play by the mutual funds.
SECTORS WITH THE BEST YOY AUM ACCRETION
Let us first focus on the size effect and look at the sectors that showed the best AUM accretion yoy in terms of absolute change in Rupee AUM to get the perspective.
| Sectors | June 2024 | June 2025 | AUM Change | (% Change) |
| Banking & Finance | 10,90,007 | 13,82,296 | 2,92,289 | 26.82% |
| Pharmaceuticals | 2,98,513 | 3,89,967 | 91,454 | 30.64% |
| Retail | 91,417 | 1,73,222 | 81,805 | 89.49% |
| IT-Services | 3,43,435 | 4,14,601 | 71,166 | 20.72% |
| Chemicals & Fertilisers | 99,663 | 1,45,119 | 45,456 | 45.61% |
| Telecom | 1,20,708 | 1,57,740 | 37,032 | 30.68% |
| Oil & Gas | 2,47,401 | 2,82,364 | 34,963 | 14.13% |
| FMCG | 1,91,220 | 2,23,326 | 32,106 | 16.79% |
| Auto & Auto Ancillaries | 3,83,835 | 4,09,116 | 25,281 | 6.59% |
| Capital Goods | 1,57,689 | 1,80,130 | 22,441 | 14.23% |
| Aviation | 20,590 | 38,854 | 18,264 | 88.70% |
| Power | 1,19,883 | 1,35,841 | 15,958 | 13.31% |
| Consumer Durables | 88,651 | 1,01,576 | 12,925 | 14.58% |
| Infrastructure | 1,21,632 | 1,33,484 | 11,852 | 9.74% |
| Metals & Mining | 1,30,820 | 1,42,608 | 11,788 | 9.01% |
Data Source: AMFI, MF Websites (₹ in Crore)
Here are the sectors with the best yoy AUM accretion in rupee terms. This can be biased in favour of large sectors. Here are some quick findings. The biggest value creation was obviously in banking, but the second best AUM accretion was pharma, which is not exactly high on weightage. Retail, IT Services, Chemicals, and Telecom are the other 4 sectors in the pecking order. Retail was driven by digital stories; telecom by Bharti Airtel, while Chemicals looks like a pure alpha play on the specialty chemicals story.
SECTORS WITH BEST PERCENTAGE AUM ACCRETION
To neutralize the size effect, we also look at the percentage change in AUM on a yoy basis, to give due credit to smaller sized sectors that could score high.
| Sectors | June 2024 | June 2025 | AUM Change | (% Change) |
| Retail | 91,417 | 1,73,222 | 81,805 | 89.49% |
| Aviation | 20,590 | 38,854 | 18,264 | 88.70% |
| Agri | 12,810 | 19,530 | 6,720 | 52.46% |
| Ratings | 3,203 | 4,811 | 1,608 | 50.20% |
| Chemicals & Fertilisers | 99,663 | 1,45,119 | 45,456 | 45.61% |
| Diamond & Jewellery | 22,916 | 30,033 | 7,117 | 31.06% |
| Telecom | 1,20,708 | 1,57,740 | 37,032 | 30.68% |
| Pharmaceuticals | 2,98,513 | 3,89,967 | 91,454 | 30.64% |
| Banking & Finance | 10,90,007 | 13,82,296 | 2,92,289 | 26.82% |
| Others | 29,444 | 36,504 | 7,060 | 23.98% |
| Diversified | 13,206 | 15,982 | 2,776 | 21.02% |
| IT-Services | 3,43,435 | 4,14,601 | 71,166 | 20.72% |
| Textile | 26,652 | 31,216 | 4,564 | 17.12% |
| FMCG | 1,91,220 | 2,23,326 | 32,106 | 16.79% |
| Alcohol | 23,869 | 27,788 | 3,919 | 16.42% |
Data Source: AMFI, MF Websites (₹ in Crore)
This list has throw up some interesting names. We have ignored the miscellaneous sector as it does not convey anything. Retail is right at the top with 89.5% growth in AUM yoy, thanks largely to Eternal and Swiggy. Aviation is also at the top with yoy AUM growth of 88.7%, thanks to the relentless rally in Indigo Airways. Agri, Ratings, Chemicals and Diamonds & Jewellery are the other toppers in this percentage accretion list.
What are the sectors that saw percentage depletion in AUM. The negative list includes Abrasives, Plastic Products, Media, and Paper Products; all of which have more micro related bottom-up issues. But the good news is that this all-round accretion in key sectors has happened despite the global uncertainty and the overhang of reciprocal tariffs.