MUTUAL FUNDS IN INDIA

A Mutual Fund is a company that pools the money of many people and institutions and invests it in
stocks, bonds or other securities to pursue a specific financial objective. The decision to buy or sell the
bonds, stocks or securities are made by professional money managers and the gains or losses are shared
by the investors in accordance with the amount of investment done. Mutual funds can be categorized as
money market funds or stock funds, corporate and government bond funds, municipal or tax-free bond
funds, balanced funds etc. which can be further subdivided into many categories.
SNEAK PEEK INTO THE HISTORY
The first mutual fund was setup in 1963, when the government of India created the unit trust of India
(UTI). It enjoyed monopoly until 1987 when government allowed the public sector undertakings and Life
Insurance Corporation (LIC) and General Insurance Corporation of India to enter the mutual funds
industry. State Bank of India, Canara Bank, Bank of Baroda and Punjab National bank were the first
players to make a foray into the market. With the creation of Securities and Exchange Board of India in
1992 the mutual fund industry became more regulated and transparent.
ADVANTAGES OF MUTUAL FUNDS
DIVERSIFICATION- It reduces the risk of loss by diversifying the investment into many different fields.
PROFESSIONAL MANAGEMENT- Investments are handled by experts who have vast amount of
experience and know the financial market out and out.
LIQUIDITY & CONVENIENCE
RISK AND RETURN
Every investment involves certain amount of risk. Bonds are considered safer than stocks but the returns
are higher. Higher the risk involved in an investment higher is the return that can be obtained in the
end. In the case of mutual funds, the common stocks of smaller companies are considered riskier than
those of larger and well established companies. In accordance with the risks the returns also increase.
Mutual fund investments are categorized into the following three categories viz.
Lower Risk & Return Investments- Money market funds
Short and intermediate term bond funds.
Moderate Risk & Return Investments- Long term bond funds
Balanced funds
Growth and income funds.
High Risk & Return Investments- Growth funds & Aggressive growth funds.
TYPES OF MUTUAL FUNDS
Large cap oriented equity funds
Diversified equity funds
Small and mid-cap equity funds
Thematic infrastructure funds
Consistent performers- Equity funds
Equity linked savings schemes
Index funds
Balanced funds
Short term income funds
Long term income funds
Consistent performers- Debt funds
Ultra short term debt funds
Liquid funds

Following are the list of companies in specializing in mutual funds investment in India
1. Axis asset management company ltd.
2. Baroda Pioneer asset management company ltd.
3. Birla sun life asset management company ltd.
4. BNP Paribas asset management India PVT ltd.
5. Canara Robeco Asset management company ltd.
6. Deutsche asset management India PVT LTD.
7. DSP Black rock asset management PVT LTD
8. Edelweiss asset management LTD
9. Escorts asset management LTD.
10. Franklin Templeton asset management India PVT LTD.
11. Goldman Sachs asset management India PVT LTD.
12. HDFC asset management company LTD
13. HDFC asset management India Company LTD.
14. HSBC asset management India Company LTD.
15. ICICI Prudential asset management company LTD.
16. IDBI asset management LTD.
17. India Infoline asset management company LTD.
18. Indiabulls asset management company LTD.
19. ING asset management Company LTD.
20. JP Morgan asset management India company LTD.
21. Kotak Mahindra asset management company LTD.
22. L&T asset management LTD.
23. LIC NOMURA mutual fund asset management company LTD.
24. Morgan Stanley investment management PVT LTD.
25. Peerless Funds management company LTD.
26. Principal PNB asset management company PVT LTD.
27. Quantum Asset management company PVT LTD.
28. Reliance Capital asset management LTD.
29. Religare Asset Management company PVT LTD.
30. Sahara Asset Management Company Pvt Ltd.
31. SBI Funds Management PVT LTD.
32. Sundaram Asset Management Company LTD.
33. Tata Asset Management LTD.
34. Union KBC Asset Management Company PVT LTD.
35. UTI Asset Management Company LTD.
Mutual funds are relatively potent and untapped source of investment till date. Primary reason for this
can be attributed to the fact that people consider it a risky investment option. Lack of awareness
regarding what mutual funds are and how they function is another reason. People also lack the
knowledge regarding how to invest in mutual funds. Despite being in the Indian Markets for over five
decades, only 10% of households have invested money in mutual fund. So mutual fund is an excellent
option to explore both from investors perspective and investment managers perspective.