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MUTUAL
FUND INDUSTRY |
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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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The
Mutual Fund industry witnessed significant developments
during the fiscal year 2005-06. In the backdrop
of a bullish market, equity schemes both new and
the existing ones became the flavour of the year,
resulting in the emergence of equity as a major
asset class. The total assets under management
grown from Rs.1,396 billion as of March 31, 2004
to Rs. 5,499 billion as of December 31, 2007. |
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190
new Schemes were launched during the year 2005-06
as against 97 in the previous year. The amount
mobilised was Rs. 70,583 crores as against Rs.
25,764 crores in the previous year, setting an
all time record. Total Funds mobilised during
year stood at Rs. 10,98,158 crores as against
Rs. 8,39,662 crores in last year representing
an increase of 31%. Redemptions at Rs. 10,45,382
crores were 25 % higher than the redemptions of
Rs. 8,37,508 crores in the previous year. On a
net basis, there was an inflow of Rs. 52,776 crores
as compared to Rs. 2,154 crores in the last year.
(Source: AMFI) |
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