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 the creation of Massachusetts Investors Trust.
The Mutual Fund industry growth was accompanied by three broad trends:
- Impressive growth in assets under management as more investors embraced Mutual Funds.
- Stricter regulation that ensured investor protection and proper supervision of the Fund Management industry.
- Introduction of more innovative products that suited the needs of different customers; from long-term retirement planning to short-term cash management.
Mutual Funds have been in existence in India since the Unit Trust of India (UTI) was established in 1963. UTI was set up by the Government of India and the 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 of 31st March 2022, Mutual Funds in India managed assets exceeding 37.7 lakh crore.
Source: AMFI, Industry Research / Note: FY22 AUM is as of Mar-22