The benefit of an enhanced activity level in the Indian mutual fund industry is evident in the industry structure. The industry is beginning to show signs of moving towards maturity. This paper aims to capture the developments in the industry over the years.

The Association of Mutual Funds in India (AMFI)2 has officially classified the four decades of mutual funds in India into four phases. The first phase during the years 1963-1987 saw UTI consolidating its position by offering a host of products and extending its reach throughout the country. The next phase (1987 _93) marked the arrival of mutual funds sponsored by public sector banks and financial institutions. With the arrival of private sector players, both Indian and foreign, the third phase begun (1993-1996). In 1996 SEBI (Mutual Funds) Regulations came into being. The assets managed by the industry grew at a Compounded Annual Growth Rate (CAGR) of about 28 % during 1984-2002 (pls. refer to Chart A).

Today there are 388 schemes managed by 31 fund houses. (Pls. see Table 2 for the composition of the mutual fund assets). Out of the 388 schemes, 302 are open-ended, managing about 80% of the assets. The close-ended schemes are the offerings of the past. There is wide diversity of ownership of sponsors and Asset Management Companies (AMCs). (Pls. see Table 3 for the segment-wise composition of Mutual Fund industry). While impressive names such as Merrill Lynch and Morgan Stanley have entered the mutual fund industry in India, dominant mutual fund players such as Fidelity, Vanguard and T. Row Price have hesitated to start operations in India.

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