Future of Mutual Funds in India
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Future of Mutual Funds in India:
By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is estimated that by 2010 March-end, the total assets of all scheduled commercial banks should be Rs 40,90,000 crore.
The annual composite rate of growth is expected 13.4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by year 2010, mutual fund assets will be double.
Growth of Mutual Funds in India:
The Indian Mutual Fund has passed through three phases. The first phase was between 1964 and 1987 and the only player was the Unit Trust of India, which had a total asset of Rs. 6,700 cores at the end of 1988. The second phase is between 1987 and 1993 during which period 8 Funds were established (6 by banks and one each by LIC and GIC). The total assets under management had grown to 61,028 crores at the end of 1994 and the number of schemes was 167. The third phase began with the entry of private and foreign sectors in the Mutual Fund industry in 1993. Kothari Pioneer Mutual Fund was the first Fund to be established by the private sector in association with a foreign Fund. As at the end of financial year 2000(31st march) 32 Funds were functioning with Rs. 1, 13,005 crores as total assets under management. As on august end 2000, there were 33 Funds with 391 schemes and assets under management with Rs 1, 02,849 crores.
The securities and Exchange Board of India (SEBI) came out with comprehensive regulation in 1993 which defined the structure of Mutual Fund and Asset Management Companies for the first time.
Several private sectors Mutual Funds were launched in 1993 and 1994. The share of the private players has risen rapidly since then.
Currently there are 34 Mutual Fund organizations in India managing 1,02,000 crores.
Analysis of Mutual Funds Schemes:
To study the currently available schemes I have taken the fact sheets available with the AMCs. The fact sheet provides the historical data about the various schemes offered by the AMC, investment pattern, dividend history, ratings given, Fund Managers Credentials, etc.
I have analyzed the schemes in the following three categories:
* Equity or Growth Scheme
* Balanced Scheme
* Income or Debt Scheme
* Kotak Mutual Fund
* SBI Mutual Fund
* Franklin Templeton India Mutual Fund
* Principal Mutual fund
Basis for Analysis:
Net Asset