Overview
Modern portfolio theory suggests that a diversified portfolio of shares and other asset classes (such as corporate bonds, treasury bonds, or money market instruments) will realise more predictable returns if markets are well regulated.
The first Indian mutual fund was launched in 1963 when the Government of India created the Unit Trust of India (UTI). Funds in India today fall broadly into equity, hybrid, and debt categories.
Mutual fund statistics
- Total Assets Under Management (AUM) as of December 2023: ₹50.78 trillion (about US$600 billion)[1]
- 73% of units were redeemed within two years during FY2022–23[2].
- Roughly 6% of household savings were invested in mutual funds in FY2023[3].
- 68% of large-cap actively managed funds underperformed their benchmarks over 10 years[4].
Mutual Fund Units Redeemed Data
| Holding period | FY22 | FY23 |
|---|---|---|
| 0–1 year | 56.83% | 50.11% |
| 1–2 years | 15.14% | 23.04% |
| 2–3 years | 5.03% | 9.81% |
| 3–5 years | 20.41% | 13.96% |
| More than 5 years | 2.59% | 3.09% |
Category breakup (AUM)
- Equity funds — ₹20.33 lakh crore (Nov 2023)[5]
- Hybrid funds — ₹6.90 lakh crore (Jan 2024)[5]
- Debt funds — ₹11.97 trillion (Mar 2020)[6]
Controversies & crises
- Franklin Templeton (2020): Wound up six credit funds amid liquidity stress; SEBI later imposed a ban on new debt schemes[7].
- Reliance Mutual Fund (2019): Liquidity issues because of DHFL exposure[8].
- IL&FS crisis (2018): Defaults caused markdowns and reforms[9].
- Amtek Auto (2015): JP Morgan restricted redemptions after default[10].
Market segment & AUM
Investor hesitation stems from risk perception and information gaps. There were 46 mutual funds as of June 2013; industry AUM grew by 23.43% in 2023[11].
Average Assets Under Management (Dec 2015 – Mar 2016)
| Fund | Schemes | QAAUM (₹ lakh) | Prev QAAUM | Inc/Dec | % change |
|---|---|---|---|---|---|
| Axis AMC | 263 | 3776454 | 3456348 | 320105 | 9% |
| Birla Sun Life AMC | 806 | 13678510 | 13684493 | 5312 | 0% |
| HDFC AMC | 1173 | 17608456 | 17866622 | -256390 | -1% |
| SBI AMC | 652 | 10732737 | 10058453 | 672760 | 7% |
Mutual fund acquisitions
| Seller | Acquired by | Year |
|---|---|---|
| Pioneer ITI MF | Franklin Templeton | 2002 |
| Zurich India AMC | HDFC MF | 2003 |
| Reliance MF | Nippon India | 2019 |
| L&T Asset Management | HSBC Global AM | 2022 |
See also
- Risk management
- Financial risk management
- 2020 stock market crash
- Great Recession
- Bombay Stock Exchange
- National Stock Exchange of India
References
- Association of Mutual Funds in India (AMFI), Dec 2023.
- AMFI redemption statistics FY22–FY23.
- RBI Household Savings Report 2023.
- S&P SPIVA India Scorecard 2023.
- AMFI Category-wise AUM data.
- SEBI Annual Report 2020.
- SEBI order on Franklin Templeton schemes.
- Economic Times: Reliance MF crisis, 2019.
- Business Standard: IL&FS impact on funds, 2018.
- JP Morgan & Amtek Auto case, 2015.
- Industry AUM growth reports, 2023.