Interesting statistics about the Indian Mutual Fund Industry

Abhishek87 · September 6, 2018, 10:46am

AMFI recently celebrated its 25th anniversary and released a factbook in association with CRISL. Here are some interesting numbers about the industry.

The ratio of the industry’s assets under management (AUM) to bank deposits has grown from
13% as of March 2016 to 22% as of March 2018.

Growth has not been just an urban phenomena. Assets under management from cities beyond the top 15 (B15) have grown at 32% annualised since 2014.

Money entering mutual fund schemes through the digital route has multiplied from ~0.5% of gross inflows two years back to ~10% in June 2018. - Ashu Suyash MD & CEO, CRISIL Ltd.

History of the Indian Mutual Fund Industry

1963: Formation of the Unit Trust of India

1964: Launch of the maiden scheme of UTI-Unit Scheme

1987: Entry of public sector funds SBI Mutual Fund was first one followed by Canbank Mutual Fund

1993: Emergence of private sector funds Franklin Templeton (erstwhile Kothari Pioneer) was the first of its kind

1993-2003: Robust growth and revised MF regulation from SEBI in 1996, entry of foreign funds, several mergers and acquisitions.

2009: Removal of the entry load

2012: Single plan structure for mutual fund schemes l Cash investment allowed in mutual funds l Fungibility of total expense ratio (TER) allowed l Portion of TER to be used for investor education l Entire exit load to be credited to the scheme l Launch of Rajiv Gandhi Equity Savings Scheme (RGESS)

2013: Reduction in Securities Transaction Tax (STT) for equity funds l Uniform Dividend Distribution Tax (DDT) of 25% on all debt mutual funds l Product labelling l Introduction of direct plans

2014: Changed the definition of ‘long term’ for debt mutual funds to 36 months from 12 months for LTCG l Tax exemption limit for investment in financial instruments under Section 80C raised to Rs 1.5 lakh from Rs 1 lakh

2015: Launch of MF Utility (MFU) - Digital aggregator platform by the industry, for the industry l SEBI asked fund houses to shift from colour coding to Riskometer which classified schemes based on the risk profile l EPFO started investing in the equity market via Exchange Traded fund (ETF) l SEBI allowed gold ETFs to invest up to 20% of their assets in the government’s Gold Monetisation Scheme

2016: SEBI tightened norms for mutual fund investment in corporate bonds l Allowed investment advisors to use the infrastructure of the stock exchanges for sale and purchase of mutual fund units l Provided easy entry to the foreign fund managers keen to enter India

2017: SEBI allowed mutual funds to invest in REITs and InvITs l Allowed investment up to Rs 50,000 per mutual fund per financial year through digital wallets l Instant access facility to the liquid funds investors (via online mode) of up to Rs 50,000 or 90% of the folio value, whichever is lower l Government discontinued the tax benefits of RGESS

2018: SEBI asked fund houses to benchmark returns of equity schemes against a total return index (TRI) l SEBI introduced categorisation and rationalisation of mutual fund schemes making it simpler for investor to understand l LTCG of 10% without indexation introduced for equity-oriented funds for investment horizon of > 1 year, subject to capital gains of over Rs 1 lakh per assessee per year. Dividend plans of equity-oriented funds subject to a DDT of 10%, deducted at source l Mutual fund houses asked to disclose TER for all schemes under a separate head on their websites on a daily basis l SEBI further redefined the scope for T15/B15 cities to T30/B30 and push for higher penetration

Growth of MF assets in India Vs other major countries