Which sectors did mutual funds prefer in October 2025?

14 Nov 2025 , 01:01 PM

SECTORS PREFERRED BY MUTUAL FUNDS IN OCTOBER 2025?

Which were the most preferred sectors for mutual funds in October 2025? Obviously, a one-month change gives a skewed and myopic picture; so, we looked at 1-year change between October 2024 and October 2025. In terms of absolute AUM accretion of MFs; BFSI, Retail, Pharmaceuticals, Automobiles, Oil & Gas, Telecom, and Metals/Mining were the most preferred sectors. That is along expected lines. The big change has been retail coming to second slot, largely helped by digital retail names like Eternal, Swiggy etc.

The problem with the absolute growth is that it is naturally biased in favour of the heavyweight sectors. To capture the silent growth drivers, we also looked at the percentage gains in AUM over the last 1 year between October 2024 and October 2025. In terms of MOM percentage change; Aviation, Retail, Diamonds, Telecom, and BFSI were the most preferred sectors. Retail, Telecom and BFSI are appearing in both the lists.

There is another perspective. In this analysis, we look at MF equity holdings overall (including equity holdings in hybrid and passive funds). As of October 2025; while active equity fund AUM was ₹35.17 Trillion, overall equity holdings of Indian MFs was ₹49.91 Trillion. That means, ₹14.74 Trillion (29.5%) of MF equity holdings was accounted for by the equity portion of hybrid funds, index funds, and index ETFs.

SECTORS WITH MF AUM ABOVE ₹1 TRILLION

The overall equity AUM of all mutual funds stood at ₹49.91 Trillion in October 2025; compared ₹47.62 Trillion in September, ₹46.64 Trillion in July, and ₹41.61 Trillion in October 2024. October 2025 AUM is 19.95% higher than the year-ago AUM of ₹41.61 Trillion.

Sectors	Oct-24	Jul-25	Sep-25	Oct-25
Banking & Finance	11,51,897	13,69,066	13,90,673	14,76,514
Auto & Auto Ancillaries	3,96,292	4,11,198	4,54,507	4,46,802
IT-Services	4,05,321	3,96,676	3,94,102	4,19,636
Pharmaceuticals	3,48,582	4,02,813	3,95,091	4,08,374
Oil & Gas	2,38,753	2,67,780	2,71,067	2,89,116
FMCG	2,17,837	2,28,892	2,29,002	2,37,808
Retail	1,18,420	1,80,240	1,96,503	1,95,852
Capital Goods	1,58,801	1,78,498	1,78,446	1,84,892
Telecom	1,24,492	1,48,884	1,51,828	1,63,827
Metals & Mining	1,29,378	1,35,031	1,50,690	1,58,237
Power	1,32,993	1,31,868	1,39,530	1,46,470
Infrastructure	1,31,768	1,31,434	1,31,438	1,40,280
Chemicals & Fertilisers	1,15,682	1,43,014	1,34,251	1,38,039
Consumer Durables	94,107	1,07,323	1,09,763	1,16,589
Construction Materials	88,860	1,00,293	1,00,704	1,01,254

Data Source: AMFI, MF Websites (₹ in Crore)

These top 15 sectors with AUM above ₹1 Trillion account for 92.6% of total equity AUM of Indian mutual funds. The list almost matches with the most heavyweight sectors on the index. If you look at the 5 most preferred sectors by mutual funds in terms of exposure, Pharmaceuticals is interesting, despite not being an index heavyweight. Capital Goods, Retail, Telecom, and Metals & Mining have built heft in recent months.

SECTORS WITH BEST RUPEE AUM ACCRETION IN OCTOBER 2025

Absolute AUM accretion may be vulnerable to the size effect, but they are essential to understand the changes that are most significant to the market cap.

Sectors	Oct-24	Oct-25	AUM Change	(% Change)
Banking & Finance	11,51,897	14,76,514	3,24,617	28.18%
Retail	1,18,420	1,95,852	77,432	65.39%
Pharmaceuticals	3,48,582	4,08,374	59,792	17.15%
Auto & Ancillaries	3,96,292	4,46,802	50,510	12.75%
Oil & Gas	2,38,753	2,89,116	50,363	21.09%
Telecom	1,24,492	1,63,827	39,335	31.60%
Metals & Mining	1,29,378	1,58,237	28,859	22.31%
Capital Goods	1,58,801	1,84,892	26,091	16.43%
Consumer Durables	94,107	1,16,589	22,482	23.89%
Chemicals & Fertilisers	1,15,682	1,38,039	22,357	19.33%
FMCG	2,17,837	2,37,808	19,971	9.17%
Others	33,427	51,612	18,185	54.40%
Aviation	22,693	38,102	15,409	67.90%
IT-Services	4,05,321	4,19,636	14,315	3.53%
Power	1,32,993	1,46,470	13,477	10.13%

Data Source: AMFI, MF Websites (₹ in Crore)

There are some interesting points that emerge. In the top-5, BFSI, Auto, and Oil are index heavyweights. Other significant AUM accretion stories are Retail, Pharma, Telecom, and Mining/Metals.  The sectors to watch are retail and mining. Retail has been largely helped by the digital sellers like Eternal and Swiggy. Mining & Metal stocks benefited from the hopes of improved Chinese demand as they get into trade pacts with India and the US. Chemicals was the one sector that has dropped out due to the pressure in recent months. Telecom continues to be led by Bharti Airtel, which has now emerged as the third most valuable stock by market cap in India.

SECTORS WITH BEST PERCENTAGE AUM ACCRETION IN OCTOBER 2025

To neutralize size effect, we also look at the percentage change in AUM on a yoy basis, to give credit to smaller sized sectors that score high.

Sectors	Oct-24	Oct-25	AUM Change	(% Change)
Aviation	22,693	38,102	15,409	67.90%
Retail	1,18,420	1,95,852	77,432	65.39%
Others	33,427	51,612	18,185	54.40%
Diamond & Jewellery	27,609	36,436	8,827	31.97%
Telecom	1,24,492	1,63,827	39,335	31.60%
Banking & Finance	11,51,897	14,76,514	3,24,617	28.18%
Consumer Durables	94,107	1,16,589	22,482	23.89%
Metals & Mining	1,29,378	1,58,237	28,859	22.31%
Agri	15,671	19,131	3,460	22.08%
Oil & Gas	2,38,753	2,89,116	50,363	21.09%
Shipping & Logistics	38,312	46,128	7,816	20.40%
Chemicals & Fertilisers	1,15,682	1,38,039	22,357	19.33%
Pharmaceuticals	3,48,582	4,08,374	59,792	17.15%
Capital Goods	1,58,801	1,84,892	26,091	16.43%
Realty	56,463	64,518	8,055	14.27%

Data Source: AMFI, MF Websites (₹ in Crore)

In terms of percentage accretion in market cap over the last 1 year, Aviation and Retail are at the top.  While aviation has been led by the rally in Indigo Airways (Interglobe), retail is more of a digital story comprising of names like Eternal and Swiggy. With the sharp rally in gold prices, even diamond and jewellery stocks are seeing a rally in AUM, albeit on a fairly small base. Others like Telecom and Banking are leaders in absolute growth too.

Did any sector witness percentage depletion in AUM? The negative list includes Media, Abrasives, Paper, Textiles, and Plastic Products. Some of them are typically export stories, where the punitive sanctions imposed by Trump has taken its toll. However, the domestic India-specific stories appear to be really doing the weightlifting.