2191296 Mutual Funds in India

7/27/2019 2191296 Mutual Funds in India

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ORGANISATION OF A MUTUAL FUND

There are many entities involved and the diagram below illstrates the organisational set ! o" a mtal "nd#

Organisation of a Mutal Fund

AD$ANTAG%S OF MUTUAL FUNDS

The advantages o" investing in a Mtal Fnd are#& 'ro"essional Management& Diversi"i(ation& )onvenient Administration& Retrn 'otential& Low )osts& Li*idity& Trans!aren(y& Fle+ibility& )hoi(e o" s(hemes& Ta+ bene"its& ,ell reglated

T-'%S OF MUTUAL FUND S).%M%S

,ide variety o" Mtal Fnd S(hemes e+ist to (ater to the needs s(h as "inan(ial !osition/ ris0 toleran(e and retrne+!e(tations et(1 The table below gives an overview into the e+isting ty!es o" s(hemes in the Indstry1
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FR%2U%NTL- US%D T%RMS

Net Asset Value (NAV)

Net Asset $ale is the mar0et vale o" the assets o" the s(heme mins its liabilities1 The !er nit NA$ is the net assetvale o" the s(heme divided by the nmber o" nits otstanding on the $alation Date1

Sale 'ri(e

Is the !ri(e yo !ay when yo invest in a s(heme1 Also (alled O""er 'ri(e1 It may in(lde a sales load1

Re!r(hase 'ri(e

Is the !ri(e at whi(h a (lose3ended s(heme re!r(hases its nits and it may in(lde a ba(03end load1 This is also (alled4id 'ri(e1

Redem!tion 'ri(e

Is the !ri(e at whi(h o!en3ended s(hemes re!r(hase their nits and (lose3ended s(hemes redeem their nits onmatrity1 S(h !ri(es are NA$ related1

Sales Load

Is a (harge (olle(ted by a s(heme when it sells the nits1 Also (alled/ 5Front3end6 load1 S(hemes that do not (harge aload are (alled 5No Load6 s(hemes1

Re!r(hase or 54a(03end6Load

Is a (harge (olle(ted by a s(heme when it bys ba(0 the nits "rom the nitholders1

.istory o" the Indian Mtal Fnd Indstry
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The mtal "nd indstry in India started in 789: with the "ormation o" Unit Trst o" India/ at the initiative o" theGovernment o" India and Reserve 4an0 the1 The history o" mtal "nds in India (an be broadly divided into "ordistin(t !hases

First 'hase ; 789

Unit Trst o" India ?UTI@ was established on 789: by an A(t o" 'arliament1 It was set ! by the Reserve 4an0 o" Indiaand "n(tioned nder the Reglatory and administrative (ontrol o" the Reserve 4an0 o" India1 In 78>= UTI was de3

lin0ed "rom the R4I and the Indstrial Develo!ment 4an0 o" India ?ID4I@ too0 over the reglatory and administrative(ontrol in !la(e o" R4I1 The "irst s(heme lan(hed by UTI was Unit S(heme 789 mar0ed the entry o" non3 UTI/ !bli( se(tor mtal "nds set ! by !bli( se(tor ban0s and Li"e Insran(e)or!oration o" India ?LI)@ and General Insran(e )or!oration o" India ?GI)@1 S4I Mtal Fnd was the "irst non3 UTIMtal Fnd established in Bne 78=> "ollowed by )anban0 Mtal Fnd ?De( =>@/ 'nCab National 4an0 Mtal Fnd?Ag =8@/ Indian 4an0 Mtal Fnd ?Nov =8@/ 4an0 o" India ?Bn 8@/ 4an0 o" 4aroda Mtal Fnd ?O(t 8@1 LI)established its mtal "nd in Bne 78=8 while GI) had set ! its mtal "nd in De(ember 7881

At the end o" 788:/ the mtal "nd indstry had assets nder management o" Rs1/< (rores1

Third 'hase ; 788:3: ?%ntry o" 'rivate Se(tor Fnds@

,ith the entry o" !rivate se(tor "nds in 788:/ a new era started in the Indian mtal "nd indstry/ giving the Indianinvestors a wider (hoi(e o" "nd "amilies1 Also/ 788: was the year in whi(h the "irst Mtal Fnd Reglations (ameinto being/ nder whi(h all mtal "nds/ e+(e!t UTI were to be registered and governed1 The erstwhile Eothari 'ioneer?now merged with Fran0lin Tem!leton@ was the "irst !rivate se(tor mtal "nd registered in Bly 788:1

The 788: S%4I ?Mtal Fnd@ Reglations were sbstitted by a more (om!rehensive and revised Mtal FndReglations in 78891 The indstry now "n(tions nder the S%4I ?Mtal Fnd@ Reglations 78891

The nmber o" mtal "nd hoses went on in(reasing/ with many "oreign mtal "nds setting ! "nds in India andalso the indstry has witnessed several mergers and a(*isitions1 As at the end o" Banary :/ there were :: mtal"nds with total assets o" Rs1 7/7/= (rores1 The Unit Trst o" India with Rs1


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Note#%rstwhile UTI was bi"r(ated into UTI Mtal Fnd and the S!e(i"ied Underta0ing o" the Unit Trst o" India e""e(tive"rom Febrary :1 The Assets nder management o" the S!e(i"ied Underta0ing o" the Unit Trst o" India hasthere"ore been e+(lded "rom the total assets o" the indstry as a whole "rom Febrary : onwards1

Mutual funds witness Rs18,500-cr di in A!M in AugustMumbai: Continued volatility in Indian stock markets over the US subprime mortgage crisis all

through August has led to a fall in assets of mutual funds in the country by over Rs1!"## crore

during the month$

%he total Assets under Management &AUM' of () fund houses have decreased to Rs*!+,!+)( crore

from Rs *!+!1)- crore in .uly! latest data from Association of Mutual /unds in India sho0ed$

Reliance M/ remains the countrys largest fund house 0ith its AUM increasing to Rs+,!"- crore in

August as against Rs ++!*)# crore in .uly$

ICICI 2rudential M/ is at the second rank 0ith AUM of Rs"#!+1) crore in August! increasing from

Rs*!+- crore in .uly$ 3o0ever! state4run U%I M/ 0itnessed a dip in its AUM to Rs *1!+-- crore in

August from Rs *)!"," crore previous month$5ther fund houses in the top league are 36/C M/ and /ranklin %empleton M/ 0ith AUM of Rs*#!,1

crore and Rs )-!--) crore respectively$

%he 7S8 benchmark inde9 Sense9 had 0itnessed a sharp volatility during the past month on

concerns related to the US subprime mortgage crisis$ %he inde9 had dipped belo0 the 1*!### mark

in the month! but managed to bounce back to 1"!### level in the last t0o days of the month$


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Analysts! believe the decline in the assets of fund house may be due to the redemptions by

investors on concerns of a market meltdo0n and utilisation of cash pile of mutual funds for making

purchases in the bearish markets$

5verall! mutual funds have made net purchases 0orth Rs*!#-($-# crore in August in euity

markets$ In sharp contrast! foreign institutional investors have been on a selling spree in the

domestic markets after the global meltdo0n$ %hey made net sales 0orth aroud Rs,!,,# crore inAugust

Mutual fund assets cross $100b mark4 Jun 2007, 0311 hrs IST, TNN

'rint Save %Mail ,rite to %ditor

MUM4AI# The Indian e(onomy (rossed several milestones in May1 Dring the month/ in *i(0 s((ession/the (ontrys GD' and 4S%s mar0et (a!italisation (rossed the H7 trillion mar01 Now/ the (ontrys mtal"nd indstry (rossed the H7 billion milestone1

On Satrday/ assets nder management ?AUM@ by 8 "nd hoses/ released by Asso(iation o" MtalFnds in India ?AMFI@/ was !egged at Rs la0h (rore1 At the (rrent r!ee3dollar e+(hange rate o"


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ndia's top 5 mutual fund houses

.anuary #)! )## 1:)* IS%

State-run UTI Mutual fund has toppled private setor I!I!I ;"et #uote


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3 I!I!I $rudential

4 ! ;"et #uote


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!han(e in C over last &r 3C -11C 13C -20C >= 77


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1#$ 8scorts Mutual /und 1,"#$# # 1,"(($(+ #

11$ /idelity Mutual /und -"#-1"$- ()(#$,) 1#*)"),$) "(#*$+-

1)$ /ranklin %empleton Mutual /und )-+#*(($(( )"#*($#1 (1+11+$-1 )+1(($1"

1($ 36/C Mutual /und *(,+)+-$" # *-"**()$+" #

1*$ 3S7C Mutual /und 1+(1"),$1* # 1,)1)**$* #

1"$ ICICI 2rudential Mutual /und +*#*"#,$"" (1*$,( ",1#-11$(" **11$)(1+$ I=> Mutual /und -"(),$11 #"+$1) -,,,"-$1, -1,-$+*

1,$ .M /inancial Mutual /und 1(-)*,#$#- # 1*()+,($,- #

1$ .2Morgan Mutual /und )"1+,)$- # )+))#+$, #

1-$ @otak Mahindra Mutual /und )))-",1$,( (+-(,$#, )),(+)$*1 *#,(#$"1

)#$ ?IC Mutual /und 1((,(-$,+ # 1"#*(++$,) #

)1$ ?otus India Mutual /und 1##",#-$ # -#"-,)$* #

))$ Mirae Asset Mutual /und =A =A =A =A

)($ Morgan Stanley Mutual /und (+,#)($,1 # *#"-($"* #

)*$ 2RI=CI2A? Mutual /und 1*)(*-$ # 1**(1*#$(* #

)"$ Buantum Mutual /und "+1$+ # +"(#$*- #

)+$ Reliance Mutual /und ,,)1##($,( # (-#"($1( #

),$ Sahara Mutual /und ))##* # )),(-$-- #

)$ S7I Mutual /und ),"1"*$#+ # )-11(-$) #

)-$ Standard Chartered Mutual/und

1(111)$+* ("#*$" 1*(**-1$#, ("*#$,(

(#$ Sundaram 7=2 2aribas Mutual/und

1()-1)$"+ )++,$+1 1*1(#)$1" ),(1$-)

(1$ %ata Mutual /und 1-)"$-, # )1(()**$,+ #

()$ %aurus Mutual /und (-"*"$#1 # *(+),$+) #

(($ U%I Mutual /und ")+"+1-$), # "+,1+$1* #

#rand Total $%80&'$$$ '*$%$' $*0**&+0 '+%%8+2&

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2191296 Mutual Funds in India