International Journal of Informative & Futuristic Research ISSN:

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1 Volume 5 Issue 9 May 2018 International Journal of Informative & Futuristic Research ISSN: Mutual Funds are Subject to Investment: Growth and Stand of Indian Mutual Fund Paper ID IJIFR/V5/ E9/ 015 Page No Subject Area Management Key Words Assets Under Management, Asset Class, Asset Management Company, Flow Of Fund, SIP Investment 1 Dharmesh J Patel M.Phil Scholar, School of Commerce and Management, Dr. Babasaheb Ambedkar Open University, Ahmedabad, Gujrat-India Abstract Where to invest is the most complicated and confusing issue for the common people. Investment in bank fixed deposit is the most popular avenue of investment but in recent years, rates on bank fixed deposit have been reduced to the extent that investors are in dilemma for investment decision. On the other hand, increasing inflation rate nullifies the return earned on bank fixed deposits. In that case, to accomplish future financial goals, financial planning is required for future needs to be fulfilled in the context of child education, marriage, purchase of new house or car, retirement planning etc. In Indian society, Savings is common as it is traditional custom that is passed on from generation to generation. These small savings must be channelized in a way that gives confidence to the common people to make the correct decision of investment. That means the road map must be design which removes the hurdles between the savings and investment. Investment in mutual funds through SIP route is also gaining ground for its flexibility of investing in smaller proportion. The fall of rates on bank fixed deposits and the rise of mutual funds assets are hand in hand. Technological advancement, use of smart phones with internet has made the investors become well informed about the changes taken place around them. Advertisement on TV channels about Mutual fund sahi hai is also influencing the investors to divert their savings towards mutual fund industry. Also performance analysis of the mutual fund industry leads the common people to take the right decision for their savings to be invested. This work is published under Attribution-NonCommercial-ShareAlike 4.0 International License 9264

2 1. INTRODUCTION The rate of interest on bank fixed deposit is decreasing day by day. Due to that, return on bank FD is reducing. On the other hand inflation is increasing rapidly. As a result of that, actual purchasing power of the money is lowering in present compare to past. Moreover, insurance on bank FD is only rupees one lakh for whatever amount of FD is made with the bank. Also people are loosing the confidence on PSU banks for large number of financial scams coming out day by day in various PSU banks. Overall the investors of the bank FD are confused in selecting the investment avenue. Also bankers are not reliable completely in the context of money invested in bank because they are facing tremendous pressure of cross selling at the cost of bank FD. Earlier there was a limited access of market information, more dependency on financial advisors, little knowledge of investment options, lengthy procedure all those problems were common for all. As a result of that it was general belief that investment in bank FD is the best option without considering the other options. Majority Investors were believed that investment in bank FD is the safest avenue of investment with higher liquidity. Majority of them were having low risk taking attitude. Now a days, with the advancement of the technological changes, revolution in internet, wide access of market information, young and dynamic investors having greater knowledge and resources of investment options have discarded the traditional investment avenues by considering the risk and return factors. Awareness is increasing about the investment in mutual funds and also long term return figures disclosed by fund houses have played a vital role in inflow in mutual fund investment. Financial reforms introduced, digital India and cashless India campaign, mutual fund sahi hai campaign have created an atmosphere that is capable to increase the trust factors among the investors for investing in equity market through mutual funds. Also more and more people are investing in mutual funds through direct plan instead of regular plan. Why? because it is very easy to invest in mutual funds directly from the website of the fund houses or application based platform available for mobile phones without getting any headache of too much paper work and documentation. As a result of that there is no need of financial intermediaries for investment process for investing in mutual funds. Thus, the introduction of direct plan has been proved game changer for inflow of funds towards the mutual funds industry. The proportion of direct investments in equity, to the total assets held by individual investors, was about 7% in March The impact of all these points mentioned would be tested by analyzing the performance of mutual fund industry for the past time starting from 2014 to OBJECTIVES OF THE STUDY This study attempts to analyze the growth of mutual fund industry for the last five years period i.e. March 2014 to March The objectives of this study are: i. To analyse Institution Wise Growth of Asset under Management of Indian Mutual Fund ii. To analyse the Growth of Assets under Management of Indian Mutual Fund 9265

3 iii. To analyse Asset Class wise Net resource mobilization by mutual fund iv. To analyse the growth in total numbers of investor accounts v. To examine the Total number of schemes under mutual funds vi. To analyse the stand of Indian Mutual Fund around the world 3. PERFORMANCE OF MUTUAL FUNDS Table 1: Institution wise AVERAGE ASSETS UNDER MANAGEMENT FOR THE YEAR ENDED 31 MARCH Sr.No Name of the Asset Management Company A BANK SPONSORED (i) JOINT VENTURES - PREDOMINANTLY INDIAN 1 BOI AXA Investment Managers Private Limited 1,991 3,518 2,385 3,552 5,802 2 Canara Robeco Asset Management Company Ltd. 6,499 7,617 7,968 9,940 12,496 3 SBI Funds Management Private Limited 65,499 74,942 1,06,781 1,57,025 2,17,649 Union KBC Asset Management Company Pvt. Ltd. 2,847 2,726 2, TOTAL... A (i) 76,836 88,803 1,20,036 1,70,517 2,35,947 (ii) JOINT VENTURES - PREDOMINANTLY FOREIGN 1 Baroda Pioneer Asset Management Company Ltd. 8,106 7,172 9,656 10,324 13,022 TOTAL... A (ii) 8,106 7,172 9,656 10,324 13,022 (iii) OTHERS 1 IDBI Asset Management Ltd. 5,929 7,344 6,835 7,719 10,760 2 Union Asset Management Company Pvt. Ltd ,416 4,305 3 UTI Asset Management Company Ltd. 74,233 92,751 1,06,309 1,36,810 1,54,939 TOTAL... A (iii) 80,162 1,00,095 1,13,144 1,47,945 1,70,004 TOTAL. A (i+ii+iii) 1,65,104 1,96,070 2,42,836 3,28,786 4,18,973 B INSTITUTIONS (i) INDIAN 1 IIFCL Asset Management Co. Ltd LIC Mutual Fund Asset Management Limited 10,584 9,313 13,156 21,475 20,118 TOTAL... B 10,752 9,644 13,514 21,887 20,768 C PRIVATE SECTOR (i) INDIAN 1 Edelweiss Asset Management Limited ,678 6,917 12,100 2 Deutsche Asset Management (India) Private Ltd. 18,795 22,427 3 Escorts Asset Management Limited Essel Finance AMC Limited ,540 5 IDFC Asset Management Company Limited ,919 6 IL&FS Infra Asset Management Limited ,020 1,

4 7 IIFL Asset Management Ltd India Infoline Asset Management Co. Ltd Indiabulls Asset Management Company Ltd. 1,097 3,590 5,290 10,820 10, JM Financial Asset Management Limited 6,046 12,231 16,161 13,668 16, Kotak Mahindra Asset Management Company Ltd. 33,079 41,378 58,495 92,216 1,24, L&T Investment Management Limited 18,255 22,497 25,945 39,300 65, Mahindra Asset Management Company Pvt. Ltd ,995 3, Motilal Oswal Asset Management Company Ltd ,114 4,689 8,115 17, Peerless Funds Management Co. Ltd. 4,046 1, , PPFAS Asset Management Pvt. Ltd , Quantum Asset Management Company Pvt. Ltd , Reliance Capital Asset Management Ltd. 1,03,542 1,37,124 1,58, Sahara Asset Management Company Pvt. Ltd Shriram Asset Management Co. Ltd Sundaram Asset Management Company Limited 16,422 21,875 23,664 29,370 34, Tata Asset Management Limited 21,954 26,968 31,862 42,619 46, Taurus Asset Management Company Limited 3,532 4,150 3,949 1, TOTAL... C (i) 2,29,255 2,99,220 3,34,206 2,51,552 4,08,775 (ii) FOREIGN 1 BNP Paribas Asset Management India Private Limited 3,446 3,915 5,097 5,891 8,160 2 Franklin Templeton Asset Management (India) Pvt. Ltd. 45,404 70,444 66,947 81,615 1,03,152 3 Goldman Sachs Asset Management (India) Pvt. Ltd. 3,764 8,038 6, Invesco Asset Management (India) Private Limited ,528 26,203 5 Morgan Stanley Investment Management Private Ltd. 2, PineBridge Investments Asset Mgt Co. (India) Pvt. Ltd Pramerica Asset Managers Private Limited 2,411 2, Mirae Asset Global Investments (India) Pvt. Ltd ,818 3,133 7,457 15,756 TOTAL... C (ii) 58,938 86,524 81,278 1,18,491 1,53,271 (iii) JOINT VENTURES - PREDOMINANTLY INDIAN 1 Aditya Birla Sun Life Asset Management Company Ltd. 89,051 1,19,752 1,36,503 1,95,049 2,47,529 2 Axis Asset Management Company Ltd. 16,154 26,624 37,688 57,700 77,326 3 DSP BlackRock Investment Managers Private Limited 31,631 37,838 39,133 64,177 86,326 4 HDFC Asset Management Company Limited 1,12,963 1,61,634 1,75,779 2,37,178 3,00,549 5 ICICI Prudential Asset Mgmt. Company Limited 1,06,822 1,48,559 1,75,881 2,42,961 3,05,739 6 IDFC Asset Management Company Limited 41,349 51,715 52,129 60,636-7 Religare Invesco Asset Management Company Pvt. Ltd. 14,496 21,009 19, Reliance Nippon Life Asset Management Limited ,10,891 2,44,904 TOTAL... C (iii) 4,12,466 5,67,131 6,36,692 10,68,592 1,262,373 (iv) JOINT VENTURES - PREDOMINANTLY FOREIGN 1 HSBC Asset Management (India) Private Ltd. 7,659 8,242 7,274 8,812 10,261 2 ING Investment Management (India) Private Ltd

5 ISSN: JPMorgan Asset Management India Pvt. Ltd. 16,248 15,641 6, Principal Pnb Asset Management Co. Pvt. Ltd. 4,134 6,218 5,242 5,347 7,196 TOTAL... C (iv) 28,605 30,101 18,930 14,159 17,457 (v) JOINT VENTURES - OTHERS 1 DHFL Pramerica Asset Managers Private Limited ,987 26,117 23,595 TOTAL... C (v) ,987 26,117 23,595 TOTAL. C (i+ii+iii+iv+v) 7,29,264 9,82,976 10,97,093 14,78,911 18,65,471 TOTAL. (A+B+C) 9,05,120 11,88,690 13,53,443 18,29,584 23,05,212 (Rs. in crores) (Source: AMFI) From above table, it is observed that institution wise average assets under management at the end of 31 March are increasing positively with upward trend. Average assets under management under the categories of bank sponsored and private sector have increased with positive growth in all years starting from 2014 to2018 where as institutions category shows mix trend. Investment in mutual funds is increasing year by year positively that shows the confidence of the investors in terms of risk and return of the mutual funds. Total assets under management are more than double in 2018 compare to Table 2: Asset class wise disclosure of AAUM for the year ended 31 March (Rs. in crores) Category Income 4,42,376 5,16,086 5,68,700 7,78,760 7,95,972 Infrastructure Debt Fund 583 1,213 1,281 1,432 1,924 Equity (other than ELSS) 1,56,688 3,00,631 3,38,564 4,54,673 6,92,253 Balanced 16,364 26,044 40,906 84,526 1,88,099 Liquid/ Money Market 2,44,737 2,77,428 3,26,880 3,94,048 4,56,

6 Gilt 6,864 11,890 17,145 18,007 15,547 Equity - ELSS 23,928 38,537 38,788 53,505 77,849 GOLD ETF 9,099 6,996 6,335 5,643 4,860 Other ETF 1,568 7,374 12,926 37,141 70,933 Fund of Fund investing overseas 2,913 2,491 1,918 1,849 1,534 Total 9,05,120 11,88,690 13,53,443 18,29,584 23,05,212 (Source: AMFI) Above table shows the asset class wise disclosure of average assets under management for the year 2014 to 2018 ended on March 31. It is observed that Income funds are having the growth of 180% from 2014 to 2018 with upward trend year by year. Infrastructure debt fund has grown with 330% from 2014 to 2018 with upward trend year by year. Equity (other than ELSS) has grown with 442% from 2014 to 2018 with upward trend year by year. Balanced fund has grown with 1149% from 2014 to 2018 with upward trend year by year. Liquid/ Money Market fund has grown with 186% from 2014 to 2018 with upward trend year by year. Gilt fund has grown with 227% from 2014 to 2018 with upward trend year by year upto 2017 and downward trend for Equity ELSS fund has grown with 325% from 2014 to 2018 with upward trend year by year. GOLD ETF fund has grown with 53% from 2014 to 2018 with downward trend year by year. Other ETF fund has grown with 4524% from 2014 to 2018 with upward trend year by year. Fund of Fund investing overseas has grown with 53% from 2014 to 2018 with downward trend year by year. All assets class except Gold EFT and Fund of Fund investing overseas are on the track of positive growth starting from 2014 to 2018 consecutively. It is also observed that Gilt fund shows upward trend from 2014 to 2017 but in 2018 it is on downward track. The proportionate share of each category based on growth from 2014 to 2018 can be shown as under: Income 1% 2% 4% 6% Infrastructure Debt Fund Equity (other than ELSS) Balanced 15% Liquid/ Money Market 61% 4% 1% 3% 3% Gilt Equity - ELSS GOLD ETF Other ETF Fund of Fund investing overseas 9269

7 Table 3: Asset Class wise Net Inflows / Outflows for the year ended March 31 (Rs. in crores) Category Income 40,546 4,875 14,738 1,20,633-5,851 Infrastructure Debt Fund Equity (other than ELSS) -7,627 68,121 67,611 60,270 1,56,753 Balanced -1,986 9,826 19,743 36,610 89,757 Liquid/ Money Market 24,099 9,782 17,109 95,826-2,936 Gilt -1,868 7, ,306-3,277 Equity - ELSS -1,641 2,908 6,413 10,097 14,316 GOLD ETF -2,294-1, Other ETF 2,890 2,251 8,724 24,054 23,958 Fund of Fund investing overseas 1, Total 54,083 1,03,288 1,34,180 3,43,049 2,71,797 (Source: AMFI) Above table shows the asset class wise net inflows and outflows of fund for the year 2014 to 2018 ended on March 31. It is observed that Income fund shows net inflows from 2014 to 2017 with mix trend of upward and downward, while in 2018 it shows net outflows. Infrastructure debt fund shows net inflows with mix trend of upward and downward except Equity (other than ELSS) shows net outflows for 2014 and net inflows from 2015 to 2018 with mix trend of upward and downward. Balanced fund shows net outflows for 2014 and net inflows for 2015 to 2018 with upward trend year by year. Liquid/ Money Market fund show net inflows from 2014 to 2017, while in 2018 it shows net outflows. Gilt fund shows mix trend of upward and downward in net inflows and net outflows. Equity ELSS fund shows net outflows for 2014 and net inflows for 2015 to 2018 with upward trend year by year. GOLD ETF fund shows net outflows from 2014 to 2018 with overall downward trend year by year. Other ETF fund shows net inflows from 2014 to 2018 with mix trend of upward and downward. Fund of Fund investing overseas shows net inflows for 2014 and net outflows from 2015 to 2018 with overall downward trend year by year Trends in Equity Investment through Mutual Funds Equity (other than ELSS) Balanced Equity - ELSS Other ETF 9270

8 By analyzing net inflows and outflows data, Equity ELSS fund shows positive growth starting from 2014 to It clearly indicates that tax paying investors are diverting their funds towards the Equity-ELSS among other options. This is the clear sign that Equity- ELSS is gaining the ground gradually. Net inflows in Equity (other than ELSS), Balanced fund and Other ETF data indicate that equity investment is increasing rapidly with positive image of reliable avenue of investment. Table 4: Total Number of Investor Accounts for the year end March 31 (in Crores) Year Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Investor Accounts (Source: AMFI) Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Since March 2014, there is an increase in investor accounts from 3.95 crores to 7.13 crores in March Mutual funds investor s accounts are increase rapidly which is a good sign for mutual fund industry as investors are more confident than earlier for accepting the mutual funds as a reliable investment avenue. Table 5: Total Number of Scheme for the year ended March 31 Category Income Infrastructure Debt Fund Equity (other than ELSS) Balanced Liquid/ Money Market Gilt Equity - ELSS GOLD ETF Other ETF Fund of Fund investing overseas

9 Total (Source: AMFI) Above table shows the asset class wise number of schemes for the year 2014 to 2018 ended on March 31. It is observed that Income fund, Infrastructure debt fund, Balanced fund, Liquid/ Money Market fund, Gilt fund, GOLD ETF fund and Fund of Fund investing overseas show variation in number of schemes in different years either increase or decrease. Equity (other than ELSS), Equity (ELSS) and Other ETF fund show positive increase in number of schemes year by year. Equity (other than ELSS), Equity (ELSS) and other ETF are the scheme categories under which number of schemes show positive and upward trend. It is the clear indication that more and more investors are investing in these funds. That is why the number of schemes is increasing year by year. Global Assets under Management and India TOTAL NET ASSETS AROUND THE GLOBE FOR THE YEAR ENDED 31 MARCH 2018 (Millions of US dollars) India Republic of Korea Netherlands Luxembourg Ireland Germany France South Africa Japan China Australia Brazil Canada UK US (Source: IIFA) There is tremendous scope of the growth of Indian mutual fund industry compare to rest of the world. Huge market is yet to be penetrated. In a report Asset & Wealth Management Revolution: Embracing Exponential Change, PwC anticipates that global Assets under Management set to rise to $145.4 trillion by

10 TOTAL NET ASSETS AROUND THE GLOBE FOR THE YEAR ENDED 31 MARCH 2018 (in %) US UK Canada Brazil Australia China Japan South Africa France Germany Ireland Luxembourg Netherlands Republic of Korea India 4. CONCLUSION Stable government, rapid developing stage of the economy, favorable business development polices of the government, global positive factors, strong growth fundamentals, financial reforms undertaken by the government all these factors working together increase the confidence of the investors who are the source of savings and investment in particular economy. Presently India is witnessed of this transformative stage. All these positive sentiments lead the investors to flow their savings towards investment in financial assets for good return with optimistic attitude. The reflection of all these factors clearly points out in Graphical data that shows the growth of investment in mutual funds year after year. With introduction of direct Plan of investing in mutual funds and decreasing rates on bank deposits, the growth in assets size of mutual funds is expanding. Also questionable role of PSU banks in the context of High NPA, low financial performance, banking scams indirectly fosters the investors to start searching another planet for better life in terms of financial goals. Online investment in direct plans of mutual funds are gaining ground for some reasons like no intervention of financial intermediaries, paperless procedure, no need to pay extra charges in terms of transaction charges and commission. As it is said that India is a country of Young population, new generation of investors are familiar and used to online investment at their own convenience. Also our country is passing from transformation process in terms of digital India, cashless India so online transactions in mutual funds are more and more popular with the benefit of no need to pay any extra cost to any intermediaries. One another reason is anybody can participate in mutual funds with small savings by SIP. This SIP route has played a crucial role in channelizing the small monthly savings into financial assets. Less earning as well as high earning households both are comfortable with SIP route in mutual fund investment. Investment in mutual funds is subject to market risk but still it is an attractive investment avenue for the new generation investors as well as traditional investors. Investors are fully aware about the risk involved and return expected from such investment and that s why 9273

11 mutual funds are getting popular. Despite introduction of LTCG taxes, mutual funds are still attractive for investment. 5. REFERENCES [1] accessed on May 15, 2018 [2] accessed on May 22, 2018 [3] accessed on May 22,