Collective and pooled investments have existed in various traditional formats across the world for some time. Mutual Fund as we know it came into existence in 1924, with creation of Massachusetts Investors Trust.
The Mutual Fund industry growth was accompanied by three broad trends:
- Impressive growth in assets under management - More investors embrace Mutual Funds.
- Stricter regulation - Ensures investor protection and proper supervision of fund management industry.
- Introduction of more innovative products - Which suits the needs of different customers; from long term retirement planning to short term cash management.
Mutual Funds have been in existence in India, since Unit Trust of India (UTI) established in 1963. UTI was set up by Government of India and Reserve Bank of India. Unit Scheme 64, launched in 1964 was the first Mutual Fund scheme.
In 1987, other public sector banks and institutions were permitted to launch Mutual Funds. In 1993, following a wave of liberalization, the private sector and foreign sponsors were allowed to launch Mutual Funds.
This ensured that the Mutual Fund Industry rapidly acquired size, expertise and reach. As on Dec 31, 2016, Mutual Funds in India managed assets exceeding 16.93 lac crores.