Mutual funds in India
The first introduction of a mutual fund in India occurred in 1961, when the Government of India launched Unit Trust of India (UTI). Until 1987, UTI enjoyed a monopoly in the Indian mutual fund market. Then a host of other government-controlled Indian financial companies came up with their own funds. These included State Bank of India, Canara Bank, and Punjab National Bank. This market was made open to private players in 1993, as a result of the historic constitutional amendments brought forward by the then Congress-led government under the existing regime of Liberalization, Privatization and Globalization (LPG). The first private sector fund to operate in India was Kothari Pioneer, which later merged with Franklin Templeton. In 1996, SEBI formulated the Mutual Fund Regulation which is a comprehensive regulatory framework.[1]
Mutual funds are an under tapped market in India
Despite being available in the market[2] less than 10% of Indian households have invested in mutual funds. A recent report on Mutual Fund Investments in India published by research and analytics firm, Boston Analytics, suggests investors are holding back from putting their money into mutual funds due to their perceived high risk and a lack of information on how mutual funds work.[3] There are 46 Mutual Funds as of June 2013.[4]
The primary reason for not investing appears to be correlated with city size. Among respondents with a high savings rate, close to 40% of those who live in metros and Tier I cities considered such investments to be very risky, whereas 33% of those in Tier II cities said they did not know how or where to invest in such assets.
Mutual fund distribution in India
Mutual fund investments are sourced both from institutions (companies) and individuals. Since January 2013, institutional investors have moved to investing directly with the mutual funds since doing so saves on the expense ratio incurred. Individual investors are, however, served mostly by Investment advisor and banks. Since 2009, online platforms for investing in Mutual funds have also evolved.
Average Assets under Management
Assets under management (AUM) is a financial term denoting the market value of all the funds being managed by a financial institution (a mutual fund, hedge fund, private equity firm, venture capital firm, or brokerage house) on behalf of its clients, investors, partners, depositors, etc.
The average Assets under management of all Mutual funds in India for the quarter Jul-13 to Sep-13 (in INR billion) is given below:[5]
| Sr No | Mutual Fund Name | Average AUM | % |
|---|---|---|---|
| 1 | HDFC Mutual Fund | 1,034.42 | 12.70% |
| 2 | Reliance Mutual Fund | 952.28 | 11.69% |
| 3 | ICICI Prudential Mutual Fund | 853.03 | 10.48% |
| 4 | Birla Sun Life Mutual Fund | 773.44 | 9.50% |
| 5 | UTI Mutual Fund | 700.57 | 8.60% |
| 6 | SBI Mutual Fund | 595.58 | 7.31% |
| 7 | Franklin Templeton Mutual Fund | 448.12 | 5.50% |
| 8 | IDFC Mutual Fund | 396.65 | 4.87% |
| 9 | Kotak Mahindra Mutual Fund | 352.99 | 4.34% |
| 10 | DSP BlackRock Mutual Fund | 304.86 | 3.74% |
| 11 | Tata Mutual Fund | 179.66 | 2.21% |
| 12 | Deutsche Mutual Fund | 170.59 | 2.10% |
| 13 | L&T Mutual Fund | 150.79 | 1.85% |
| 14 | Sundaram Mutual Fund | 139.47 | 1.71% |
| 15 | JPMorgan Mutual Fund | 132.57 | 1.63% |
| 16 | Religare Invesco Mutual Fund | 125.12 | 1.54% |
| 17 | Axis Mutual Fund | 123.18 | 1.51% |
| 18 | LIC NOMURA Mutual Fund | 79.76 | 0.98% |
| 19 | Canara Robeco Mutual Fund | 76.16 | 0.94% |
| 20 | HSBC Mutual Fund | 67.18 | 0.83% |
| 21 | JM Financial Mutual Fund | 62.44 | 0.77% |
| 22 | Baroda Pioneer Mutual Fund | 52.63 | 0.65% |
| 23 | IDBI Mutual Fund | 47.71 | 0.59% |
| 24 | PRINCIPAL Mutual Fund | 43.00 | 0.53% |
| 25 | Goldman Sachs Mutual Fund | 41.49 | 0.51% |
| 26 | BNP Paribas Mutual Fund | 35.38 | 0.43% |
| 27 | Morgan Stanley Mutual Fund | 32.90 | 0.40% |
| 28 | Peerless Mutual Fund | 28.35 | 0.35% |
| 29 | Taurus Mutual Fund | 27.32 | 0.34% |
| 30 | Pramerica Mutual Fund | 21.66 | 0.27% |
| 31 | Union KBC Mutual Fund | 19.80 | 0.24% |
| 32 | Indiabulls Mutual Fund | 16.06 | 0.20% |
| 33 | ING Mutual Fund | 11.05 | 0.14% |
| 34 | PineBridge Mutual Fund | 11.03 | 0.14% |
| 35 | BOI AXA Mutual Fund | 10.82 | 0.13% |
| 36 | Mirae Asset Mutual Fund | 5.08 | 0.06% |
| 37 | Motilal Oswal Mutual Fund | 4.37 | 0.05% |
| 38 | Quantum Mutual Fund | 3.15 | 0.04% |
| 39 | PPFAS Mutual Fund | 2.67 | 0.03% |
| 40 | Escorts Mutual Fund | 2.52 | 0.03% |
| 41 | Sahara Mutual Fund | 2.33 | 0.03% |
| 42 | IIFL Mutual Fund | 2.07 | 0.03% |
| 43 | Edelweiss Mutual Fund | 1.94 | 0.02% |
| 44 | Daiwa Mutual Fund | 0.51 | 0.01% |
| 45 | IL&FS Mutual Fund (IDF) | - | 0.00% |
| 46 | Shriram Mutual Fund | - | 0.00% |
| 47 | SREI Mutual Fund (IDF) | - | 0.00% |
| Grand Total | 8,142.68 | 100.0% |
References
- ↑ "Mutual Funds in India". Kotak Securities. 13 December 2014. Retrieved 27 April 2015.
- ↑ "Association of Mutual Funds, India". Retrieved 4 September 2013.
- ↑ "Boston Analytics - India Watch". Retrieved 4 September 2013.
- ↑ "Average AUM - Fund-wise". June 2013. Retrieved 4 September 2013.
- ↑ "Average AUM". Association of Mutual Funds in India. Retrieved 8 December 2013.