The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank of India. The history of mutual funds in India can be broadly divided into four distinct phases
First Phase - 1964-1987
Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700 crores of assets under management.
Second Phase - 1987-1993 (Entry of Public Sector Funds)
1987 marked the entry of non-UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non-UTI Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990.
At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004 crores.
Third Phase - 1993-2003 (Entry of Private Sector Funds)
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993.
The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996.
The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs. 44,541 crores of assets under management was way ahead of other mutual funds.
Fourth Phase - since February 2003
In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs. 29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations.
The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs. 76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.
The graph indicates the growth of assets over the years.
Note:
Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust of India effective from February 2003. The Assets under management of the Specified Undertaking of the Unit Trust of India has therefore been excluded from the total assets of the industry as a whole from February 2003 onwards.
FAQs
With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families.
How big is mutual fund industry in India? ›
The Rs 37-trillion domestic mutual fund (MF) industry has seen a sharp surge in assets under management (AUM) over the past two years.
Which was the 1st mutual fund set up in India? ›
The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI).
Is the mutual fund industry evolving in India? ›
The industry itself has been evolving over the years. Though, traditional primary contributor to AUM have been corporates, in 2015 retail segment emerged as the fastest growing segment in terms of contribution to AUM growth.
Who started the first mutual fund? ›
The concept of mutual funds was invented in Europe in early 1770s. During a bleak economic situation, Adriaan Van Ketwich, a Dutch merchant created the world's first mutual fund in 1774. He pooled money from several individuals and created a diversified fund of bonds.
When was the first mutual fund launched? ›
The first modern mutual fund was launched in the U.S. in 1924. The oldest mutual fund still in existence is MFS' Massachusetts Investors Trust (MITTX), also established in 1924. The exchange-traded fund, a modern variation, has taken the market by storm since the Great Recession of 2007–2009.
How mutual fund industry is growing? ›
Growth of Mutual Fund Industry Expected in India in the Current Year and the Forthcoming Years. In 2022, it is estimated that there will be around 1.88 crores registered mutual fund investors in India as against 1.86 crore households with an annual income of more than Rs 10 lakh per annum.
Which is the biggest AMC in India? ›
The following are the top Indian AMCs with the largest Assets Under Management (AUM) as of February 2022.
- Birla Sun Life Mutual Fund (BSLMF)
- Kotak Mahindra Asset Management Company.
- Nippon India Asset Management Company.
- Axis Asset Management Company.
- UTI Mutual Fund.
- IDFC Asset Management Company.
- DSP Mutual Fund.
Current State Of The Mutual Fund Industry In India
Assets Under Management (AUM) in the mutual fund industry increased by 41% in the fiscal year 2021. The AUM was worth Rs 33.67 trillion as of June 30, 2021. The bond funds were the most appealing in fiscal 2021, with net inflows of Rs 3,299 crore.
When did sip start in India? ›
Let us assume the SIP start date was 15 years back in May 1999. Over this period, the investor would have invested Rs 5.43 lakhs in SIPs of the following mutual funds. Let us see how much wealth would they have accumulated, by investing in the following funds.
Mutual funds offer one of the most comprehensive, easy and flexible ways to create a diversified portfolio of investments.
...
Different Types of Mutual Funds
- Equity or growth schemes. ...
- Money market funds or liquid funds: ...
- Fixed income or debt mutual funds: ...
- Balanced funds:
There are 44 asset management companies (AMCs) or mutual fund houses operating in India.
Who regulates the mutual fund industry in India? ›
The fees charged by mutual funds are regulated and are subject to certain limits specified by the Securities and Exchange Board of India (SEBI). India has one of the highest savings rate globally.
Which was the first mutual fund of our country? ›
The first mutual fund scheme that was introduced in India by UTI was in the Unit Scheme (1964). UTI had Assets Under Management worth Rs. 6,700 Crores, by the end of the year 1988.
Who control Mutual Funds in India? ›
As far as mutual funds are concerned, SEBI formulates policies, regulates and supervises mutual funds to protect the interest of the investors. SEBI notified regulations for mutual funds in 1993.
What is the history of mutual fund? ›
The Mutual Fund industry in India started in 1963 with formation of UTI in 1963 by an Act of Parliament and functioned under the Regulatory and administrative control of the Reserve Bank of India (RBI).
What are the 4 types of mutual funds? ›
Most mutual funds fall into one of four main categories – money market funds, bond funds, stock funds, and target date funds. Each type has different features, risks, and rewards.
Who controls a mutual fund? ›
Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.
Which is the first bank to introduce mutual fund? ›
SBI Mutual Fund was the first Mutual Fund established in June 1987 followed by Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90) and Bank of Baroda Mutual Fund (Oct 92).
Why are they called mutual funds? ›
Mutual funds let you pool your money with other investors to "mutually" buy stocks, bonds, and other investments. They're run by professional money managers who decide which securities to buy (stocks, bonds, etc.) and when to sell them.
A Systematic Investment Plan (SIP), more popularly known as SIP, is a facility offered by mutual funds to the investors to invest in a disciplined manner. SIP facility allows an investor to invest a fixed amount of money at pre-defined intervals in the selected mutual fund scheme.
How big is the mutual fund industry? ›
The global mutual fund assets market size was valued at $54.93 trillion in 2019, and is projected to reach $101.2 trillion by 2027, growing at a CAGR of 11.3% from 2020 to 2027.
What percentage of Indians invest in mutual funds? ›
In terms of MF penetration to the total population, India has just 2.5% of its total population invested in mutual funds. US has the highest population percentage investing in mutual funds at 46%. China closely followed US at 44%.
What are the future of mutual fund? ›
The report said that mutual fund industry will benefit from the projected 11% growth in nominal GDP between FY 2021 and FY 2025. "Economic growth, coupled with rise in middle-income population and increase in financial savings is expected to boost mutual fund industry in India," it said.
Which is the No 1 AMC in India? ›
ICICI Prudential Mutual Fund
ICICI Prudential is widely known as the best AMC in India.
Which is the best performing AMC in India? ›
The top 10 AMCs in India are:
- SBI Mutual Fund.
- HDFC Mutual Fund.
- ICICI Prudential Mutual Fund.
- Reliance Mutual Fund.
- Aditya Birla Sun Life Mutual Fund.
- DSP BlackRock Mutual Fund.
- Kotak Mutual Fund.
- Tata Mutual Fund.
Growth of Mutual Funds in India is divided into six different phases depending on the structural changes which have taken place in the mutual fund industry. Now, we will see time span of each phase and development in that era. Unit Trust of India (UTI) was established in 1963 by an Act of Parliament.
What is the scope of mutual fund in India? ›
The mutual fund industry is expected to grow at a rate of 13.4% over the next 10 years. Mutual funds assets under management grew by 96% between the end of 1997 and June 2003 and as a result it rose from 8% of GDP to 15%. The industry has grown in size and manages total assets of more than $30351 million.
Is mutual funds private or government? ›
A mutual fund is an investment instrument which combines funds from many investors to invest in stocks, bonds, money market instruments and other financial assets. Mutual funds can be either public or private.
Which is the oldest SIP? ›
Among 45 odd mutual fund house in India, UTI Asset Management Company Ltd. (UTI AMC) is the oldest India's Mutual Fund Company and the most reputed names.
...
2. UTI Mid Cap Fund.
| Launch Date | 01 January 2013 |
|---|
| Rating by Groww | 3 Star |
| AUM (Fund Size) | ₹4,441 Cr |
| Riskometer | High |
| Minimum SIP | ₹500 |
8 more rows13 May 2022
Mutual Fund Systematic Investment Plans or SIPs were introduced in India way back in 1993 by Franklin Templeton Mutual Fund. Since then investing through SIPs have come a long way according to data provided by Association of Mutual Funds in India (AMFI).
Who invented SIP? ›
SIP was originally designed by Mark Handley, Henning Schulzrinne, Eve Schooler and Jonathan Rosenberg in 1996 to facilitate establishing multicast multimedia sessions on the Mbone.
What is the full form of NAV? ›
NAV or Net Asset Value is the unit price of a mutual fund scheme. Mutual funds are bought or sold on the basis of NAV.
Which type of MF is best? ›
Here's the list of the five best mutual funds for SIP:
| Fund Name | 3-year Return (%)* | |
|---|
| Parag Parikh Flexi Cap Fund Direct-Growth | 23.90% | Invest |
| PGIM India Flexi Cap Fund Direct-Growth | 25.90% | Invest |
| Mirae Asset Emerging Bluechip Fund Direct-Growth | 22.50% | Invest |
| SBI Focused Equity Fund Direct Plan-Growth | 18.30% | Invest |
3 more rowsBlue chip funds are equity mutual funds that invest in stocks of companies with large market capitalisation. These are well-established companies with a track record of performance over some time. However, as per SEBI norms on mutual fund categorisation, you don't have an official category called Blue Chip funds.
How many SIP are there in India? ›
Indian Mutual Funds have currently about 5.72 crore (57.2 million) SIP accounts through which investors regularly invest in Indian Mutual Fund schemes.
Who is the best mutual fund company? ›
Best Mutual Fund Companies in India
- SBI Mutual Fund.
- ICICI Prudential Mutual Fund.
- HDFC Mutual Fund.
- DSP BlackRock Mutual Fund.
- Aditya Birla Sun Life Mutual Fund.
- Kotak Mutual Fund.
- L&T Mutual Fund.
- Tata Mutual Fund.
There are about six equity mutual funds schemes that have offered over 20 per cent return in 2022 so far. These six schemes altogether hold about 125 stocks in their portfolios.
Who regulates mutual fund industry in India? ›
As far as mutual funds are concerned, SEBI formulates policies, regulates and supervises mutual funds to protect the interest of the investors. SEBI notified regulations for mutual funds in 1993.
Who established the mutual fund in India Mcq? ›
Hint: In India, first mutual fund was started in 1964 by Unit Trust of India (UTI). 5. UTI was established in the year: 1822.
The AUM size crossed ₹ 30 trillion (₹30 Lakh Crore) for the first time in November 2020. The Industry AUM stood at ₹39.34 Trillion (₹ 39.34 Lakh Crore) as on August 31, 2022. The mutual fund industry has crossed a milestone of 10 crore folios during the month of May 2021.
How many mutual fund company are in India? ›
There are as many as 44 AMFI (Association of Mutual Funds in India) registered fund houses in India which together offer more than 2,500 mutual fund schemes.
When did sip start in India? ›
Let us assume the SIP start date was 15 years back in May 1999. Over this period, the investor would have invested Rs 5.43 lakhs in SIPs of the following mutual funds. Let us see how much wealth would they have accumulated, by investing in the following funds.
What are the 3 types of mutual funds? ›
Mutual funds offer one of the most comprehensive, easy and flexible ways to create a diversified portfolio of investments.
...
Different Types of Mutual Funds
- Equity or growth schemes. ...
- Money market funds or liquid funds: ...
- Fixed income or debt mutual funds: ...
- Balanced funds:
Along with SEBI, mutual funds are regulated by RBI, Companies Act, Stock exchange, Indian Trust Act and Ministry of Finance. RBI acts as a regulator of Sponsors of bank-sponsored mutual funds, especially in the case of funds offering guaranteed returns.
What is mutual fund in simple words? ›
A mutual fund is a pool of money managed by a professional Fund Manager. It is a trust that collects money from a number of investors who share a common investment objective and invests the same in equities, bonds, money market instruments and/or other securities.
Who manages a mutual fund? ›
Mutual funds are operated by professional money managers, who allocate the fund's assets and attempt to produce capital gains or income for the fund's investors. A mutual fund's portfolio is structured and maintained to match the investment objectives stated in its prospectus.
What is the full form of SIP? ›
A Systematic Investment Plan (SIP), more popularly known as SIP, is a facility offered by mutual funds to the investors to invest in a disciplined manner. SIP facility allows an investor to invest a fixed amount of money at pre-defined intervals in the selected mutual fund scheme.
How big is the mutual fund industry? ›
The global mutual fund assets market size was valued at $54.93 trillion in 2019, and is projected to reach $101.2 trillion by 2027, growing at a CAGR of 11.3% from 2020 to 2027.
Which is the biggest AMC in India? ›
The following are the top Indian AMCs with the largest Assets Under Management (AUM) as of February 2022.
- Birla Sun Life Mutual Fund (BSLMF)
- Kotak Mahindra Asset Management Company.
- Nippon India Asset Management Company.
- Axis Asset Management Company.
- UTI Mutual Fund.
- IDFC Asset Management Company.
- DSP Mutual Fund.
In 2022, it is estimated that there will be around 1.88 crores registered mutual fund investors in India as against 1.86 crore households with an annual income of more than Rs 10 lakh per annum. The number of mutual funds being offered, compared to previous years, is also increasing at an exponential rate.
What percentage of Indians invest in mutual funds? ›
In terms of MF penetration to the total population, India has just 2.5% of its total population invested in mutual funds. US has the highest population percentage investing in mutual funds at 46%. China closely followed US at 44%.
Which mutual funds are under SEBI? ›
Search ▼
| Date | Title |
|---|
| Aug 30, 2022 | Aditya Birla Sun Life Nifty SDL Sep 2027 Index Fund |
| Aug 30, 2022 | Aditya Birla Sun Life Nifty SDL Sep 2025 Index Fund |
| Aug 30, 2022 | Aditya Birla Sun Life CRISIL IBX Gilt – April 2026 Index Fund |
| Aug 29, 2022 | Aditya Birla Sun Life Capital Protection Oriented Fund-Series I & II |
21 more rowsThere are about six equity mutual funds schemes that have offered over 20 per cent return in 2022 so far. These six schemes altogether hold about 125 stocks in their portfolios.
