With an army of agents at its disposal, LIC Mutual Fund plans a comeback
Left on the back burner for decades, the company now plans to tap its parent firm’s vast network of insurance agents to meet its ₹1 trillion AUM target. But experts warn that even the widest reach can’t compensate for the persistent underperformance of its biggest equity schemes.
Unlike private asset management companies’ offices, which often have a sleek, minimalist aesthetic, LIC Mutual Fund’s workspace looks exactly like you’d expect of a government-owned entity——an office with an old charm. Yet, inside the CEO’s office hangs a frame that proclaims a simple but ambitious goal – ₹1 trillion in assets.
After decades of allowing its mutual fund venture to take a back seat, LIC, it appears, is finally giving it the attention it deserves.
Though LIC holds a massive ₹54 trillion in core insurance assets, its mutual fund business remains a modest player with just ₹44,383 crore in assets under management (AUM) after 36 years of operations. The contrast with its peers that entered the mutual fund business around the same time is stark. SBI Mutual Fund now has ₹12.6 trillion in AUM, while Canara Robeco Mutual Fund (formerly Canbank Mutual Fund) has ₹1.2 trillion.
While the insurance behemoth plans to leverage its massive agent network to bridge this gap, experts said even the widest reach couldn't compensate for the persistent underperformance of its biggest equity schemes.
Agentic advantage
To achieve its ₹1 trillion AUM target, LIC plans to, among other things, use its sponsor company’s vast network of about 1.48 million insurance agents to sell mutual funds. For context, there are 178,000 lakh mutual fund distributors across India.
“Leveraging LIC’s extensive agent network will certainly help us grow our AUM because these agents have strong relationships with customers, built on trust," said Ravi Kumar Jha, CEO at LIC Mutual Fund.
Jha, who took over as CEO in 2024, said the company is training insurance agents through structured programs and digital modules to ensure they understand mutual fund products, compliance requirements, and advisory best-practices. LIC Mutual Fund has so far empanelled 6,200 LIC insurance agents as active distributors.
The main challenge is changing the agents’ mindset to sell investment rather than insurance, Jha said, though continuous engagement, education, and incentives are helping LIC MF overcome this hurdle. LIC insurance agents will also need to take the National Institute of Securities Markets’ (NISM’s) Series V-A mutual fund distributor exam before they can sell mutual funds. This may pose another problem. "Many insurance agents are elderly and may not want to appear for an exam and shift to selling mutual funds," an AMC official said.
LIC mutual fund also plans to increase its digital and physical presence to raise its AUM. It has more than 50 branches at present and it plans to grow to 100 branches over the next few years, Jha said.
It has also added more specialists to the fund management team. “We have added specialists in equity, debt, and passive strategies to cater to a diverse portfolio and larger AUM," Jha said. The investment team now comprises 14-15 individuals.
Performance is paramount
Experts said, however, that this would not be enough to ensure success, and that benefits of better distribution would kick in only once LIC Mutual Fund started to perform better.
Bhavana Acharya, co-founder at Prime Investor, a research platform for mutual funds, said LIC Mutual Fund schemes have generally been in the middle or the bottom of their rankings. Its top three equity schemes by AUM – the large cap, large & mid cap, and flexi cap funds – have consistently underperformed their benchmarks.
“An AMC typically garners assets in two ways: through its own distribution network, or through outperformance that draws attention to the funds. If performance is poor, it will be difficult to attract investors," he added.
- According to its fact sheet, LIC's large cap fund has delivered a 14.75% compound annual growth rate (CAGR) in the five years to November 2025 vs its benchmark’s 16.65% CAGR.
- Its large and mid cap fund clocked a 17.74% CAGR over the same period, underperforming the 21.12% CAGR of its benchmark.
- Its flexi cap fund clocked a 15.58% CAGR over the same period, underperforming its benchmark’s 18.61% CAGR.
Addressing this concern, Jha said he has a plan to improve performance. “We aim to improve scheme performance by reinforcing our research and risk management frameworks and adopting advanced analytics and technology to gain better market insights," he said. “Our investment strategies are continuously reviewed and aligned with macroeconomic trends and investor expectations to ensure long-term value creation."
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