Mutual Funds And You

DSIJ analyses MF schemes on various parameters and conducts a relative analysis of schemes to arrive at the result outcome.

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There are different perspectives to look at things and the same applies to mutual fund schemes as well. Schemes should be evaluated on different parameters; the important among these are the profile of the fund house, net assets of the fund, and the fund manager's track record. Nevertheless, every investor is obviously interested in knowing the past returns performance of the scheme they consider to invest their money in. Past performance gives you some confidence but it does not take you far unless you measure it relatively.

In the following paragraphs we will be trying to exactly answer your question of where your investment stands in the mutual fund universe and more importantly you could gauge your fund's performance vis-a-vis others in the category.

The Mutual Fund Universe

The Indian mutual fund industry has grown by leaps and bound in the past few years. The asset size as well as number of investors have grown significantly. The first mutual fund in India was launched in the 1960's (UTI's 1st scheme-US-64) and it took the industry more than 50 years to attain Rs10 lakh crore of assets under management (AUM). The next Rs 10 lakh crore took less than five years. In terms of number of unique folios (number of investors), the number has risen for the 64th consecutive month (September 2019; 8.56 crore mutual fund investors).

There are 44 asset management companies (AMC) operating right now in India and managing around Rs 25.6 lakh crore of AUM, as at the end of September 2019. The proportionate share of equity-oriented schemes is 42.1% of industry assets in September 2019. Individual investors (Retail + HNI) account for 87% of the overall number of investors in equity-oriented schemes while institutional investors account for the rest. Industry data shows that 68% of individual investor assets are held in equity-oriented schemes.