Mutual funds in India
The first introduction of a mutual fund in India occurred in 1963, when the Government of India launched Unit Trust of India (UTI).[1] UTI enjoyed a monopoly in the Indian mutual fund market until 1987, when a host of other government-controlled Indian financial companies established their own funds, including 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, the regulator of mutual funds in India, formulated the Mutual Fund Regulation which is a comprehensive regulatory framework.[2]
Mutual funds are an under tapped market in India
Deposit being available in the market[3] 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.[4] There are 46 Mutual Funds as of June 2013.[5]
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.
Distribution
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.
Servicing
Larger Indian Mutual Fund Industry has benefited from outsourcing the activity of servicing their investors to two of the leading Registrar and Transfer Agents (RTAs) in India namely CAMS and Karvy. While CAMS commands close to 65% of the Assets servicing, rest is with Karvy. Franklin Templeton Mutual Fund services its investors through its own in-house RTA set up.
Both the RTAs have vibrant network of their local offices which enable the Mutual Fund Investors to transact locally. These touch points (or) Customer Service Centers (CSCs), provide a wide range of servicing including, financial transaction acceptance & processing, non financial changes, KYC fulfillment formalities, nomination registration, transmission of units apart from providing statement of accounts etc.
These two RTAs also provide most of the similar facilities in their respective websites which are very user friendly.
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 Dec 2015 to Mar 2016 (in ₹ Lakh) is given below:[6]
| Sr No | Mutual Fund Name | Total Schemes | QAAUM AUM (₹ Lakh.) | Prev QAAUM (₹ Lakh.) | Inc/Dec (₹ Lakh.) | Percentage |
|---|---|---|---|---|---|---|
| 1 | Axis Asset Management Company | 263 | 3776454.37 | 3456348.88 | 320105 | 9% |
| 2 | Baroda Pioneer Asset Management Company | 111 | 965630.33 | 925542.12 | 40132 | 4% |
| 3 | Birla Sun Life Asset Management Company | 806 | 13678510.7 | 13684493.34 | 5312 | 0% |
| 4 | BNP Paribas Asset Management Company | 114 | 509706.79 | 500795.21 | 9209 | 2% |
| 5 | BOI AXA Asset Management Company | 76 | 238501.41 | 242767.91 | 2887 | 1% |
| 6 | Canara Robeco Asset Management Company | 142 | 804326.86 | 751779.86 | 52627 | 7% |
| 7 | Deutsche Asset Management Company | 8 | 27698 | 17194 | 10504 | 61% |
| 8 | DHFL Pramerica Asset Management Company | 491 | 2598683.24 | 216345 | -80979 | -37% |
| 9 | DSP BlackRock Asset Management Company | 398 | 4015131.25 | 3918267.17 | 96865 | 2%a |
| 10 | Edelweiss Asset Management Company | 70 | 167774.29 | 163236.28 | 4538 | 3% |
| 11 | Escorts Asset Management Company | 60 | 28559.18 | 29222.27 | -663 | -2% |
| 12 | Franklin Templeton Asset Management Company | 200 | 6784076.49 | 7172216.54 | -384257 | -5% |
| 13 | Goldman Sachs Asset Management Company | 18 | 610139.99 | 685179.35 | -75039 | -11% |
| 14 | HDFC Asset Management Company | 1173 | 17608456.44 | 17866622.24 | -256390 | -1% |
| 15 | HSBC Global Asset Management Company | 155 | 790382.19 | 837762.82 | -47151 | -6% |
| 16 | ICICI Prudential Asset Management Company | 1529 | 17596397.6 | 17223699 | 390751 | 2% |
| 17 | IDBI Asset Management Company | 92 | 689266.37 | 756428.17 | -67162 | -9% |
| 18 | IDFC Asset Management Company | 453 | 5228379.46 | 5486421.83 | -249600 | -5% |
| 19 | IIFCL Asset Management Asset | 1 | 35797.56 | 34293.89 | 1504 | 4% |
| 20 | IIFL Asset Management Company | 18 | 48543.76 | 42203.84 | 6340 | 15% |
| 21 | IL & FS Infra Asset Management Company | 12 | 92296.34 | 90029.5 | 2267 | 3% |
| 22 | Indiabulls Asset Management Company | 56 | 528955.04 | 491675.45 | 37279 | 8% |
| 23 | JM Financial Asset Management | 179 | 1616090.42 | 1586776.74 | 29313 | 2% |
| 24 | J.P. Morgan Asset Management Company | 141 | 641451.9 | 750109.43 | -107986 | -14% |
| 25 | Kotak Mahindra Asset Management Company | 431 | 5873108.27 | 5513383.02 | 362464 | 7% |
| 26 | L&T Asset Management Company | 246 | 2594480.1 | 2505850.82 | 89990 | 4% |
| 27 | LIC Nomura Mutual Fund Asset Management Company | 176 | 1315562.4 | 1238408.04 | 92942 | 8% |
| 28 | Mirae Asset Management Company | 55 | 313272.14 | 280239.04 | 33101 | 12% |
| 29 | Motilal Oswal Asset Management Company | 31 | 468921.13 | 455222.64 | 14103 | 3% |
| 30 | Peerless Asset Management Company | 57 | 98524.1 | 102441.7 | -3917 | -4% |
| 31 | PPFAS Asset Management Company | 1 | 61357.1 | 62931.88 | -1575 | -3% |
| 32 | Principal Asset Management Company | 123 | 528106.02 | 587875.66 | -59770 | -10% |
| 33 | Quantum Asset Management Company | 15 | 66093.04 | 65531.63 | 561 | 1% |
| 34 | Reliance Asset Management Company | 1015 | 15936949.34 | 15787817.36 | 152561 | 1% |
| 35 | Religare Global Asset Management Company | 267 | 1959617.91 | 1988459.31 | -28622 | -1% |
| 36 | Sahara Asset Management Company | 68 | 9929.16 | 11002.32 | -758 | -7% |
| 37 | SBI Asset Management Company | 652 | 10732737.36 | 10058453.69 | 672760 | 7% |
| 38 | Shriram Asset Management Company | 4 | 3716.98 | 3711.53 | 5 | 0% |
| 39 | Sundaram Asset Management Company | 479 | 2366370.94 | 2187696.57 | 185302 | 8% |
| 40 | Tata Asset Management Company | 324 | 3186223.17 | 3155590.09 | 26752 | 1% |
| 41 | Taurus Asset Management Company | 65 | 394858.04 | 350334.19 | 44524 | 13% |
| 42 | Union KBC Asset Management Compay | 60 | 290228.21 | 273213.25 | 17015 | 6% |
| 43 | UTI Asset Management Company | 1220 | 10630921.82 | 10612903.52 | 16124 | 0% |
| Gross | 11856 | 135912187.2 | 132170477.1 |
| S. No | Seller | Acquired By | Year |
|---|---|---|---|
| 1 | Alliance Capital MF | Birla Sunlife | 2005 |
| 2 | Standard Chartered | IDFC | 2008 |
| 3 | AIG Global Investment Group MF | PineBridge MF | 2011 |
| 4 | Benchmark Mutual Fund | Goldman Sachs | 2011 |
| 5 | Fidelity | L&T Finance | 2012 |
| 6 | Morgan Stanley's | HDFC | 2013 |
| 7 | PineBridge MF | Kotak MF | 2014 |
| 8 | ING Mutual Fund | Birla Sunlife | 2014 |
| 9 | Daiwa AMC | SBI MF | 2013 |
| 10 | Goldman Sachs | Reliance MF | 2015 |
| 11 | Deutsche | Pramerica | 2015 |
| 12 | JP Morgan | Edelweiss | 2016 |
References
- ↑ "MF History". Association of Mutual Funds of India.
- ↑ "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 April 6, 2016.