Nagaland, once a distant outlier in India’s financial map, is now emerging as an unexpected mutual fund hotspot. Backed by growing financial literacy and rising participation by women investors, the northeastern state is witnessing some of the fastest growth in the domestic mutual fund industry, recent data shows.
According to the latest data from the ICRA Analytics, the Average Assets Under Management (AAUM) of the domestic mutual fund industry grew 21.94% on a yearly basis for the period ended June 2025. On a monthly basis, the same rose 3.61%. This growth was broad-based across all categories.
The data revealed that on a monthly basis, Nagaland witnessed the maximum growth in AAUM which stood at 62.47% followed by Lakshadweep and Ladakh which grew 19.18% and 18.17%, respectively.
On a yearly basis, Nagaland recorded the highest growth in AAUM at 100.57%, followed by Dadra and Nagar Haveli with a growth of 56.52%. Except for Lakshadweep, all states saw an increase in AAUM in June 2025, with Daman and Diu registering the lowest growth at 13.50% year-on-year.
The contribution of growth-oriented equity schemes remained the highest at 54.76%, followed by debt-oriented schemes at 14.88% and liquid schemes at 12.50%. Growth and equity-oriented schemes continued to contribute the most to the AAUM across states. Ladakh recorded the highest share of equity-oriented schemes at 90.85%, followed by Lakshadweep at 84.07%.
Among the states, Maharashtra led with the largest contribution at 40.61%, followed by New Delhi, Gujarat, Karnataka, and West Bengal, each contributing less than 10%. Together, the top five states accounted for over 65% of the domestic mutual fund industry’s AAUM.
As per data collected for May 2025, on a monthly basis, Nagaland, with an AAUM of Rs 3,390.71 crore, recorded the highest growth at 56.87%. The northeastern state was followed by Lakshadweep and Daman & Diu, which registered growth of 14.82% and 8.70% respectively.
In contrast, Sikkim and Mizoram saw a decline in AAUM during the month, falling by 0.62% and 2.63% respectively.
According to a recent research, it was observed that many investors in Nagaland prefer high returns as the primary objective when investing in mutual funds. The second most important factor was low risk as most respondents of the study showed the least concern for tax benefits, as the majority belongs to the ST community in the state, which is exempt from paying income tax. The study also found that nearly half of its respondents were very satisfied with the expert advice provided by fund houses.
Northeast states lead in women’s participation
As per Association of Mutual Funds in India (AMFI), the surge in investments comes against the backdrop of significant gains in financial inclusion. The Financial Inclusion Index (FI Index) prepared by the Reserve Bank of India places the country’s financial inclusion level at 64.2 as of March 2024, up from 60.1 in March 2023.
As per the AMFI’s 2024 study, the national participation rate of women in mutual funds is 25.1% in terms of unique investors and 33.2% in terms of women investors’ AUM as a percentage of individual investors’ AUM. The participation rate based on AUM is higher than the unique investor-based participation rate, indicating that women investors tend to invest larger amounts than men.
AMFI noted that thirteen states and union territories have outperformed the national average for women’s AUM contribution, including several of them from the Northeast. Mizoram tops the list with women contributing 44.1% of the total individual investors’ AUM, followed by Nagaland (39.1%), Andaman & Nicobar Islands (38.6%), and Sikkim (37.9%). Meghalaya (36.5%) and Assam (33%) also figure prominently.
The non-profit industry body credited that this trend is closely linked to the region’s unique social fabric indicating that northeastern states like Meghalaya have matrilineal societies where women play central roles in household and community financial decisions.
It also highlighted the high literacy rates and progressive social indicators in states like Nagaland and Mizoram which further bolster women’s participation in investment avenues like mutual funds.
With the Northeast leading in women’s participation and mutual fund growth, the region is likely becoming a significant contributor to the country’s evolving mutual fund industry.
Also Read: Why Assam’s eviction drive has Nagaland districts on edge