Growth And Development Of Mutual Fund Schemes In India

Transcription

1 Research Paper Growth And Development Of Mutual Fund Schemes In Paper ID IJIFR/ V2/ E2/ 031 Page Subject Area Business Management Key Words Mutual Fund, Income Fund, Equity Fund, Exchange Traded Fund Associate Professor Dr. S. Poornima 1 Department of Business Management PSGR Krishnammal College for Women Coimbatore Assistant Professor R. K. Sudhamathi 2 Department of Management Studies Dr. N.G.P. Institute of Technology Coimbatore Abstract Mutual fund industry in has undergone four phases of its growth. Under each phase it has witnessed tremendous changes. First phase ( ) was solely dominated by UTI. Second phase ( ) was marked by the entry of public sector mutual funds. Third Phase ( ) witnessed the entry of private sector funds. Fourth phase (since February 2003) was the period during which UTI was bifurcated into two separate entities, namely UTI of, functioning under the purview of mutual fund regulation and UTI Mutual Fund, registered with SEBI and functions under the mutual fund regulations. The above phases of growth multiplied mutual fund schemes in. This article attempts to examine the growth of mutual fund schemes in. 1 Introduction Mutual fund industry in has undergone four phases of its growth. Under each phase it has witnessed tremendous changes. First phase ( ) was solely dominated by UTI. Second phase ( ) was marked by the entry of public sector mutual funds. Third Phase ( ) witnessed the entry of private sector funds. Fourth phase (since February 2003) was the period during which UTI was bifurcated into two separate entities, namely UTI of, functioning under the purview of mutual fund regulation and UTI Mutual Fund, registered with SEBI and functions under the mutual fund regulations. The above phases of growth multiplied mutual fund schemes in. At the outset, the growth in mutual fund schemes can be examined in two ways. (1) Categorywise growth in mutual fund schemes in. (2) Portfolio-wise growth in mutual fund schemes in. Copyright IJIFR

2 Year (31 March) ISSN (Online): th Edition, Page : Category-wise Growth in Mutual Fund Schemes in According to category-wise mutual funds can be broadly classified in open-ended fund, close-ended fund, assured return fund and interval fund. Table 1 depicts the category-wise growth in number of mutual fund schemes in from March 2000 to March It indicates that the number of mutual fund schemes have risen to 1634 in March 2014 from 387 in March Thus, the number of mutual fund schemes has registered a Compounded Annual Growth Rate (CAGR) of percent on the whole. The open-end mutual fund schemes have risen to 777 in March 2014 from 234 in March 2000 and it has registered CAGR of 8.95 percent. Close end mutual schemes have increased from 116 in March 2000 to 796 in March It has shown a CAGR of percent. The assured return schemes have decreased to 21 in March 2002 from 37 in March It has ceased from market after the year Interval funds have originated from the year But the number of schemes has been reduced from 82 in March 2008 to 65 in March It has a negative CAGR of percent. Thus the analysis on category-wise growth in number of mutual fund schemes in has led to the interpretation that mutual fund schemes in have recorded CAGR of percent overall. Out of this, the open end funds have shown CAGR of 8.95 percent and close-end funds have shown a CAGR of percent. Assured return fund ceased from the market from the year 2002 onwards. Interval fund which originated in the year 2008 has a negative growth rate of percent. Table1: Category-Wise Growth In Number Of Mutual Fund Schemes In OPEN-END CLOSE-END ASSURED RETURN INTERVAL TOTAL CAGR

3 Year (31 March) ISSN (Online): th Edition, Page : Category-Wise s In Total Number Of Mutual Funds In Table 2 shows percentage share of various mutual fund categories to total number of mutual fund schemes in for the period from March 2000 to March The open-end mutual fund schemes percentage with respect to total number of mutual fund schemes in ranges from percent to percent. Similarly, close-end mutual fund schemes percentage with respect to total number of mutual fund schemes in ranges from 8.16 percent to percent. Assured return fund percentage with respect to total number of mutual funds in ranges from 5.33 percent to 9.56 percent only. Interval return fund percentage share with respect to total number of mutual funds in ranges from 5.13 percent to 2.60 percent. Thus, it could be interpreted from the Table 2 that the open-end mutual funds constitute the major percentage of share (47.44 percent to percent) out of total mutual funds in. This was followed by close-end mutual fund schemes which range from 8.16 percent to percent. Assured return mutual fund schemes (5.33 percent to 9.56 percent) and Interval mutual fund schemes (5.13 percent to 2.60 percent) are very marginal in their proportion when compared to total number of mutual funds in. Table: 2 Category-Wise In Total Number Of Mutual Fund Schemes In OPEN-END CLOSE-END ASSURED RETURN INTERVAL TOTAL Percentag e CAGR

4 ISSN (Online): th Edition, Page : Growth Of Mutual Fund Schemes Across Type Of Portfolio In Table 3: Growth Of Mutual Fund Schemes Across Type Of Portfolio In Year Income Equity Balanced Liquid/ Money Gilt ELSS Equity Gold ETF s Other ETF s Overseas FOF Total CAGR indicates percentage share of various types of portfolio According to type of portfolio, mutual fund schemes in can be classified into Income, Equity, Balanced, Liquid/Money market, Gilt, Equity-Linked Tax Saving Scheme (ELSS) Equity, Gold Exchange Traded Funds ( Gold ETF), Other Exchange Traded Funds ( Other ETF) and Overseas Fund of Funds ( Overseas FOF). Table 3 depicts the growth of mutual fund schemes across type of portfolio in. Income funds have recorded a Compounded Annual Growth Rate (CAGR) of percent. Its percentage with respect of total number of mutual fund schemes ranges from 25 percent to 65 percent for the study period of March 2000 to March Equity mutual fund schemes have a CAGR of 9.17 percent. And its percentage to total number of mutual funds ranges from 19 percent to 39 percent. Balanced mutual funds have a CAGR of 0.96 percent, its percentage to total number of mutual funds ranges from 2 percent to 12 percent. 424

5 ISSN (Online): th Edition, Page : Liquid/ money market mutual funds have a CAGR of 5.22 percent. Its percentage to total number of mutual funds ranges from 11 percent to 3 percent. Gilt schemes have a CAGR of 7.49 percent. Its percentage to total number of mutual funds ranges from 7 percent to 3 percent. ELSS Equity has recorded a CAGR of 8.78 percent. Its percentage share to total number of mutual funds ranges from13 percent to 3 percent. Gold ETF s originated in the year 2007 have recorded CAGR of percent. Its percentage to total number of mutual fund schemes constitutes only 1 percent. Other ETF s also originated only from the year 2007 and have recorded CAGR of percent. Its percentage to total number of mutual fund schemes ranges from 1 percent to 2 percent. Overseas FOF s originated from the year 2008 have recorded CAGR of percent. Its percentage to total number of mutual fund schemes ranges from 1 percent to 2 percent. Thus, it could be interpreted from the Table 3 that among the various types of portfolios Income portfolio constitutes a major (25 percent to 65 percent) proportion followed by Equity portfolio (19 percent to 39 percent). The other types of portfolio funds such as Balanced, Liquid/Money market, Gilt, ELSS Equity constitute only less proportion. Gold ETF s, Other ETF s and Overseas FOF s are new entrants and are attracting large investors. 5 Conclusion Entry of private sector companies in to mutual fund industry has brought tremendous growth in the industry. The open-end mutual funds constitute the major percentage of share out of total mutual funds in. Among the various types of portfolios Income portfolio constitutes a proportion followed by Equity portfolio. The other types of portfolio funds such as Balanced, Liquid/Money market, Gilt, ELSS Equity constitute only less proportion. Gold ETF s, Other ETF s and Overseas FOF s are new entrants and are attracting large investors. References [1] Amitab Gupta ( 2001) Mutual funds in : A study of investment management. Finance, XV(2), [2] A.G. (2001) Mutual funds in. New Delhi: Anmol Publications Pvt. Ltd. [3] Agarwal A.M. (2000). Mutual Funds Emerging Trends and Prospects. Finance XIV (4), [4] Prasad G, P.K. (2008). Growth of Mutual Fund Industry in. Sourthern Economist,