MUTUAL FUND INDUSTRY
An Overview
The mutual fund industry in india
began with the setting up of the Unit Trust of
india
(UTI) in 1963 by the Government of India.
Till the year 2000, UTI has grown to be a dominant player in the
industry with the assets of over Rs. 76,547 crores as of March 31, 2000. the UTI is governed by a special legislation, the Unit Trust of India
Act, 1963. in 1987 public sector banks
and insurance companies were permitted to set up mutual funds. Also the two insurance companies LIC and GIC
established mutual funds. Securities
Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation)
1993, which for the first time
established a comprehensive regulatory framework for the mutual fund
industry. Since then several mutual
funds have been set up by the private and the joint sectrors.
Growth of Mutual Funds
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 assets of Rs. 6700 crores at the end of 1988. The second phase is between 1987 and 1993 in
which period 8 funds were established (6 by banks and one each by LIC and
GIC). The total assets under management
had grown to rs. 61028 crores at the end of 1994 and the number of schemes were
167.
INTRODUCTION
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 the
private sector in association with a foreign fund. At the end of financial year 2000 (31st
March) funds were functioning with Rs. 113005 crores as total assets under
management. As on August end 2000 there
were 33 funds with 391 schemes and assets under management with Rs. 102849
crores.
As you probably know, mutual funds have become extremely
popular over the last 20 years. What was once just another obscure financial
instrument is now a part of our daily lives. More than 80 million people, or
one half of the households in America, invest in mutual funds That means that, in the United States alone,
trillions (yes, with a "T") of dollars are invested in mutual funds.
In fact, to many people, investing meaying mutual funds.
After all, it's common knowledge that incesting in mutual funds is (or at least
should be) better than simply letting your cash waste away in a savings account,
but, for most people, that's where the understanding of funds ends. It doesn't
help that mutual fund salespeople speak a strange language that, sounding sort
of like English, is interspersed with jargon like MER, NAVPS, load/no-load,
etc.
Originally
mutual funds were heralded as a way for the little guy to get a piece of the
market. Instead of spending all your free time buried in the financial pages of
the Wall Street Journal, all you have to do is buy a mutual fund and you'd be
set on your way to financial freedom. As you might have guessed, it's not that
easy. Mutual funds are an excellent idea in theory, but, in reality, they
haven't always delivered. Not all mutual funds are created equal, and investing
in mutuals isn't as easy as throwing your money at the first salesperson who
solicits your business.
OBJECTIVES
Ø To study the tax savings scheme on mutual funds, its
performance in the market, and its exposure to stock.
Ø To study the potential of mutual funds in ICICI Prudential
life insurance co.ltd.
Ø To analyse the performance of various mutual funds schemes
and suggests the best one.
RESEARCH METHODOLOGY
SOURCES OF DATA:
Ø Secondary data:This data has been
collected from the financial reports and statements of the company.
LIMITATIONS:
Ø The study is limited to the mutual Fund of ICICI prudential
life insurance.
Ø
It studies about its
performance and tax savings.
Ø
The duration of the
study is limited.
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