Mutual Fund And Its Trend In

India
Made By
Mr. Vishal Narvekar
[SYBFM]

Introduction
A Mutual Fund is a trust that pools the savings of a number of
investors who share a common financial goal.
The money collected is invested in capital market instruments such
as shares, debentures etc.

The income earned through these investments and the capital

appreciation realized are shared by its unit holders.
The income earned is shared in proportion to the number of units
owned by them.
It is most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed
basket of securities at a relatively low cost.

Emergence of Mutual Fund in India

Mutual funds in India began in 1964
Unit Trust of India (UTI) was the first MF company
Remains the market leader even today, Having about
68% of the market share
Lost monopoly in 1987 With entry of public sector
mutual funds Promoted by public sector banks and
insurance companies
Industry was open to foreign institutions in 1993

Trends Of Mutual Fund In India

In 1963, finance minister Shri T. Krishnaswami gave the
idea of mutual funds.
The origin of mutual fund industry in India is with the
introduction of the concept of mutual fund by UTI in
the year 1963.
The first scheme launched by UTI was Unit Scheme in
1964.
At the end of 1988 UTI had Rs.6,700 crores of assets
under management.

 Though the growth was slow, but it accelerated

from the year 1987 when non-UTI players
entered the industry.
SBI Mutual Fund was the first non- UTI Mutual
Fund established in June 1987
followed by: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)

The private sector entry to the MF rose the AUM

to Rs. 470 bn in March 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.
The industry has also witnessed several mergers and acquisitions.
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 was having highest Rs.44,541 crores of assets
under management in year 2003.

 SEBI Removed Entry Load in MF on 1 August,

2009
Introduction of Purchase/Sale facility through
Stock Exchanges November, 2009
National Stock Exchange (NSE) launched
India's first Mutual Fund Service System
(MFSS) on November 30, 2009 through which
an investor can subscribe or redeem units of a
mutual fund scheme

Diversification
Economies of Scale
Advantage of
Mutual Fund

Divisibility
Liquidity
Professional Management
The Bottom Line

Fluctuating Returns
Diversification

Disadvantages of
Mutual Fund

Cash, Cash & More Cash

Costs
Misleading Advertisements
Evaluating Funds

Schemes of Mutual Fund

By Structure

By Objective
Income Oriented Schemes

Open Ended Mutual Funds

Growth Oriented Schemes

High Growth Schemes
Hybrid Schemes

Close Ended Mutual Funds

Tax Saving Schemes

Money Market Mutual Funds

Process of Mutual Fund

Pass it to

Returns

Investors
Pool their money
with

Generates

Securities

Fund Manager
Invest in

Organisation of a Mutual Fund

FUND SPONSPOR/SETTLOR
KOTAK MAHINDRA FINANCE LTD.
TRUST
KOTAK MAHINDRA MUTUAL FUND
TRUSTEE
KOTAK
MAHINDRA
TRUSTEE CO. LTD.

INVESTMENT
MANAGER &
ADVISOR
KOTAK MAHINDRA ASSET
MANAGEMENT CO. LTD.

UNIT HOLDERS

INVESTMENT MANAGER & ADVISOR

KOTAK MAHINDRA ASSET
MANAGEMENT CO. LTD.

APPOINTS
CUSTODIANS
REGISTRARS
BANK
DISTRIBUTORS

Investment Avenues of Mutual

Fund
Equity Fund

Debt Fund

Index Fund

Sectoral Fund

Diversified Fund

Gold ETF

Regulatory Body of Mutual Fund

AMFI (Association of Mutual Fund in India),
the apex body of all the registered Asset
Management Companies.

Was incorporated on August 22, 1995, as a

non-profit organisation.
As of now, all the 44 Asset Management
Companies that are registered with SEBI, are
its members.

Restrictions on investments by
Mutual Funds
Investment in debts instruments (rated
Investment) shall not exceed 15% of NAV

below

Debt instruments issued by a single issuer only up to

10% of the NAV
Not more than 10% of the paid up capital in any Co.

Issue expenses shall not exceed 6% of the fund

No investment in unlisted associate company

Growth In Asset Under Management

700000
600000

Re. (crores)

500000
400000
300000
200000
100000

Years
Source: AMFI website

Valuation of NAV

Total Market Value of the Assets /Securities in the

Portfolio of the Fund All Liabilities

NAV = ------------------------------------------------------Number of funds units outstanding

Major Mutual Fund Companies in

India & Comparison

Birla Sun
Life
Mutual
Fund

HDFC
Mutual
Fund

ICICI
Prudential
Mutual
Fund

Reliance
Mutual
Fund

UTI
Mutual
Fund

Conclusion
Mutual fund industry is one of the fastest
growing industry in India and it has already
established in foreign countries. Investing in
Mutual Funds is more safe as compared to
equity as well as it give handsome returns.

Sources
http://www.amfiindia.com
http://www.investopedia.com
http://www.livemint.com/Leisure/7geeBIScf3
HZAN8M5marTJ/5-top-mutual-fundhouses.html
http://www.preservearticles.com/201203312
9506/short-notes-on-organisation-of-mutualfunds.html

Thank Y

u!!!