Have you heard of mutual funds, which pool money from numerous investors and invest it in equities, bonds, and other money market instruments? A mutual fund serves as both an investment and a business. Mutual funds operate in such a way that you, as an investor, purchase a unit of share in a portion of the mutual fund, such as the portfolio's value. As a result, the investor technically acquires a portion of the firm and its assets.

If the invested amount produced favourable returns, which are greatly dependent on the assets chosen by the investors, the investors win; otherwise, the investors lose. Mutual fund investors obtain their returns in three ways: capital gains, dividends and an increase in the mutual fund's plan.

Mutual Fund Industry Market Size In India

The mutual fund sector in India was founded in 1963 when the Government of India launched the Unit Trust of India. The first move toward millennials occurred in 1964, when UTI created the first mutual fund plan in India, with public sector firms such as Punjab National Bank, SBI, Indian Bank and Bank of Baroda participating in the scheme, which was valued at Rs 6,700 crores by the end of 1988.

After a tremendous heyday in the mutual fund business in India, the industry collaborated to build a portal for the private sector, and by 1993, India had burgeoned in the Mutual fund Industry. According to data, the Indian mutual fund sector had Rs 31.43 trillion in assets under administration as of March 2021, representing a 41% increase in fiscal 2021.

SEBI's Recent Developments

Some changes were made to SEBI Regulation 1996 in June 2021, requiring them to conform with the new mutual fund requirements by September 1st, 2021. The mutual fund is obligated to provide performance, risk, outcomes, and portfolio information to investors solely for the scheme in which they have invested.

Current State Of The Mutual Fund Industry In India

Assets Under Management (AUM) in the mutual fund industry increased by 41% in the fiscal year 2021. The AUM was worth Rs 33.67 trillion as of June 30, 2021. The bond funds were the most appealing in fiscal 2021, with net inflows of Rs 3,299 crore. Credit risk funds had the largest net outflows of Rs 28.923 crore.

Wrapping Up

Indian people are huge fans of cricket and its players. And, as they say, "mutual funds SAHI HAI!" These cricketers are ardent admirers of mutual funds. The mutual fund business is rapidly expanding, and the SAHI HAI campaign, which was launched in 2017, has contributed significantly to this expansion by increasing public awareness of mutual funds and resulting in investor education.

In the first quarter of fiscal year 21-22, 12 lakh new investors joined India's rapidly developing mutual fund market. As more individuals become aware of the advantages and security offered by buying mutual funds, the sector is projected to increase in the future years. 

 

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