| MUTUAL
FUND INDUSTRY |
|
Over the
past ten years, the Indian Mutual Fund
Industry has been one of the fastest growing
sectors in the Indian capital and financial
markets. It is passing through its biggest
transitional phase. While the domestic
players are consolidating the foreign
companies have been making entry in a
big way. The industry scenario has become
extremely competitive and delivered excellent
performance. The added new products and
services meet varying investment needs
of investors. |
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The
industry has passed through various phases
and experienced multifold growth. The
rapid growth in the industry has led to
considerable changes in regulation, the
structure of funds available and the composition
of net assets across various industry
segments, as well as in the portfolio
of investment funds. |
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First
Phase – 1964-87
Unit Trust of India (UTI) was established
on 1963 by an Act of Parliament. At the
end of 1988 UTI had Rs.6,700 crores of
Assets Under Management. |
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Second
Phase – 1987-1993
(Entry of Public Sector Funds) It marked
the entry of non- UTI, public sector mutual
funds set up by public sector banks, with
SBI Mutual Fund being the first to take
the lead |
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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. 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 |
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Fourth
Phase – since February
2003: In February 2003, the mutual fund
industry entered its current phase of
consolidation and growth. |
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This sector can broadly be divided
based on the nature of the schemes launched
by the mutual funds. The fixed income
asset class, which comprises income, liquid,
gilt and money market schemes, comprises
a major share of total funds under management and the other two asset classes – equity
and balanced schemes. |
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| The
mutual fund industry has also experienced
considerable activity over last few years
with the total assets under management
growing at CAGR of 20.6% over the period FY06-11 to Rs. 5,923 bn as on
March 31, 2011. |
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