The first open-ended mutual fund was known as Massachusetts Investment Trust. This allowed small investors to buy in a diversified portfolio and then sell shares for the value of the underlying assets.
In 1959, the mutual fund industry jumped from 1 million shareholders to 3.9 million investors. The assets also jumped from $1.5 billion to $14 billion.
First phase from 1964 to 1987
India’s first mutual fund was established in 1963 named Unit Trust of India. This was an initiative of the Government of India and the RBI. In 1978, UTI was delinked from RBI and IDBI took over the regulatory and administrative control. UTI launched its first scheme Unit Scheme 1964.
Second phase from 1987 to 1993
In 1987, public sector mutual funds were set up by public sector banks LIC and GIC.
Third phase from 1993 to January 2003
After the establishment of Sebi in April 1992, the Indian security market gained more importance. In 1993, erstwhile Kothari Pioneer (now known as Franklin Templeton Mutual Fund) was the first private sector mutual fund house. The number of mutual funds also increased over the years and the industry witnessed many mergers and acquisitions during the third phase. As of January 2003, there were around 33 MFs with a total asset base of Rs 1.21 lakh crore, of which UTI alone had AUM of Rs 44,541 crore.
Fourth phase from February 2003 to April 2014
In February 2003, UTI was separated into two different entities. Due to the global meltdown in 2009, securities markets all over the world went down.
Current phase since May 2014
Since May 2014, the mutual fund industry has been witnessing continuous inflows and the AUM also increased along with the number of investor folios. The overall industry has increased around 6-fold in 10 years from Rs 9.16 trillion as of February 2014 to Rs 54.54 trillion as on February 29, 2024.
The number of investor folios has gone up from 8.18 crore as of February 28, 2019, to 17.42 crore as of February 29, 2024. It has increased more than 2-fold in five years. On an average 15.40 lakh new folios have been added every month in the last five years since February 2019.
The number of mutual fund SIP accounts has also crossed 1-crore mark and the total number of SIP accounts were recorded at 8.20 crore.
