New Delhi, Jan. 27 -- In the last 18 months, the Indian equity market has moved in a narrow range. It has never really broken away from its September 2024 highs, nor has it crumbled under the weight of expectations. In the investing space, testing times like these for the equity market are also tests of resilience for investment products such as mutual funds.

The Indian mutual fund industry has undergone an unprecedented expansion in its investor base during the post-2020 market boom. So far, it has held on well. The gains it has made seem foundational in nature, and its intrinsic appeal has withstood the tapering of returns.

In the last five years, mutual funds' assets under management (AUM) have swollen from Rs.31 trillion in December...