The mutual fund industry in India began in 1963 with the formation of the Unit Trust of India (UTI) as an initiative of the Government of India and the Reserve Bank of India (RBI). UTI launched its mutual fund scheme in 1964. The year 1987 marked the entry of public sector mutual funds set up by Public Sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). In June 1987, SBI Mutual Fund became the first non-UTI mutual fund in India, established in the form of a trust, governed by the Indian Trusts Act, 1882. This was followed by LIC Mutual Fund, Canbank Mutual Fund, Indian Bank Mutual Fund, GIC Mutual Fund, Bank of India Mutual Fund and PNB Mutual Fund.
During the period of 1987-1993, the Assets Under Management (AUM) of MF industry had increased almost seven times, from ₹6,700 crores to ₹47,004 crores. It was during this period, the investors allocated large parts of their earned money to investments in the mutual funds.
Expansion & Regulation:
The year 1993 announced a new era in the mutual fund industry. This year marked the entry of private companies in the sector. After the Securities and Exchange Board of India (SEBI) Act was passed in 1992, 11 private sector fund houses were set up to compete with existing ones till 1995.
In 1996, with the inception of SEBI Mutual Fund Regulations, the growth of the mutual fund industry reached newer heights. It provided a uniform standard of norms for all the operating mutual funds, which led the industry to grow exponentially.
As the industry expanded, a non-profit organization, the Association of Mutual Funds in India (AMFI), was established in 1995. Its objective is to promote healthy and ethical marketing practices in the Indian mutual fund Industry. SEBI has made AMFI certification mandatory for all those engaged in selling or marketing mutual fund products.
The AUM of the Indian MF Industry has grown from ₹3.26 trillion to ₹5.87 trillion in 2012 and reached the milestone of ₹10 trillion in 2014, which has approximately doubled to ₹20.97 trillion in August 2017.
In FY2017, total inflow in the category has been ₹70,367 crores with net inflows in every month. Retail participation in the Equity category is high because of the popularity of the Systematic Investment Plan (SIP) route. According to AMFI, the mutual fund industry added about 6.2 lakh SIP accounts every month on an average during FY2017 (till February 2017), with an average ticket size of ₹3,200 per account.
While investments in liquid funds (₹3.51 lakh crore assets) has only increased by 25% in May-16 compared to Oct-14 levels, ETF has commanded the highest increase at 62% though it has only ₹0.26 lakh crore worth assets followed by Equities at 48% (₹ 4.45 lakh crore assets) and Debt Funds at 32% (₹6.23 lakh crore assets).
Indian Mutual Fund industry is no doubt, growing at a very fast pace. The scope of Mutual Funds is very bright, in a country like India owing to its growing awareness among investors, especially individuals, in particular, I recommend you learn more at Social Boosting.
Ask Your Query
As a matter of fact you can watch live market trading that helps you to connect with CMT. Join a Technical Analysis Course which works on real time markets by using tools & techniques . That’ll give you behavioural understanding of real time Share market. Understanding the money management by real time trading or investment activity. As we know CMT is an MCQ Exam & ask question on application level. Create short notes of Course Content. Get PPT based Short Notes & note interpretation of tools & Techniques on technical analysis. Short Notes help you out to quick revision at the CMT exam time. CMT Books have very complicated language & course content is not properly aligned as it takes topics from various books of different writers.
So we have to take individual topics and understand concepts in simple, Concise and Clear manner. Take content from various books or websites like Investopedia or Stock Charts on Each Topic for in-depth understanding. Apply tools & techniques with the help of Technical analysis or trading software’s. Read Books twice as MCQ can be created from a single line. while study mark important topics.