Passive Debt Funds Nearly Double Share of Debt MF Assets in Three Months

Passive debt funds saw a sharp rise in their share of India's debt mutual fund market during the June 2026 quarter. Data from CafeMutual shows that passive debt assets increased from ₹98,447 crore in March 2026 to ₹1.87 lakh crore in June 2026. That is an increase of nearly 90% in just three months.

The jump was much faster than the growth in the overall debt mutual fund market. Total debt AUM stood at ₹21.93 lakh crore in June, compared with ₹21.73 lakh crore in March. As a result, passive funds' share of total debt assets almost doubled from 4.5% to 8.5% during the quarter.

Passive Debt AUM Rises Sharply

Passive debt funds generally follow a fixed income index. Unlike active debt funds, the portfolio is not built mainly around a fund manager's decision to select individual securities. The overall debt mutual fund market did not see a major change in size during the quarter. Total debt assets increased from ₹21,73,402 crore in March to ₹21,92,906 crore in June. This works out to a rise of ₹19,504 crore, or about 0.9%.

The bigger change came within the market itself.

The share of pure active debt assets fell from 95.5% in March to 91.4% in June. Passive products, meanwhile, took a larger portion of the industry's debt assets.

Edelweiss Has the Largest Passive Debt Book

Edelweiss Mutual Fund had the largest passive debt AUM among the fund houses covered.

The fund house had ₹58,812 crore in passive debt assets against total debt AUM of ₹81,874 crore. Passive products therefore made up nearly 72% of its debt assets. Nippon India Mutual Fund came next with passive debt AUM of ₹26,435 crore. SBI Mutual Fund followed at ₹18,122 crore.

Not all fund houses saw their debt assets increase.

Kotak Mutual Fund recorded the largest decline among major fund houses. Its debt AUM fell by ₹10,677 crore to ₹1,76,499 crore during the quarter.

Tata Mutual Fund's debt assets declined by ₹3,687 crore. ABSL Mutual Fund, DSP Mutual Fund and ICICI Prudential Mutual Fund also reported declines of ₹1,660 crore, ₹1,517 crore and ₹1,182 crore, respectively. HDFC Mutual Fund saw only a small change. Its debt AUM fell 0.24%, from ₹2,48,425 crore in March to ₹2,47,817 crore in June.

In terms of total debt assets, SBI Mutual Fund remained the largest fund house with around ₹2.88 lakh crore. ICICI Prudential Mutual Fund followed at ₹2.72 lakh crore, while HDFC Mutual Fund had ₹2.48 lakh crore. ABSL Mutual Fund and Kotak Mutual Fund rounded out the top five, with ₹2.15 lakh crore and ₹1.76 lakh crore, respectively.

Passive Debt Funds Gain Ground

The June quarter marked a notable shift in India's debt mutual fund market.

Passive debt AUM increased from ₹98,447 crore to ₹1.87 lakh crore, pushing its share of total debt assets from 4.5% to 8.5%. The overall debt fund market, however, grew by less than 1% during the same period.

That contrast is important. The numbers point to a change in how debt assets are being allocated, rather than simply a broad-based expansion of the debt mutual fund industry.