Nse Sep 2009 Newsletter

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A R T I C L E S MUTUAL FUNDS– ARE THEY FOR MUTUAL BENEFIT? By Anupam Mitra* “Two roads diverged in a wood and I - I took the one less travelled by, and that has made all the difference.” - Robert Frost The journey of mutual funds in India formally began way back in 1964 with the establishment of a public sector monopoly Unit Trust of India (UTI). It all began as a Government initiative to prod the small investor to savour the benefits of stock market investing in an affordable manner and inculcate a habit of financial saving as opposed to physical saving. UTI existed till 2000 after which it was bifurcated into UTI Mutual Fund and Specified Undertaking of UTI, the former being registered with SEBI. SBI Mutual Fund was the first non-UTI mutual fund established in 1987. This was followed by other public sector mutual funds like Canbank Mutual fund, LIC Mutual Fund, Indian Bank Mutual Fund etc. Since the launching of Kothari Pioneer Mutual Fund in 1993 as the first private sector mutual fund, the industry has indeed come a long way. SEBI (Mutual Funds) Regulations, which came into effect from 1993, detailed specific procedures to be followed for sale, distribution advertising disclosure, compliance etc. Over the years, particularly in the later part of nineties, the industry has also gone through some degree of consolidation through mergers and acquisitions. In this article, various facets of the growth experience of the mutual fund industry are analyzed ( Exchange traded funds and fund of funds are not considered in this article)

. Has the industry been successful in carrying forward the objective with which it com-

menced? How has it developed and evolved over the years? What have been its unique selling propositions? Are the potential investors spread far and wide across the length and breadth of this country aware of the existence of this industry? Have the innovative products created by the industry served the purpose of the investors? How has the industry responded to the challenges and opportunities confronting it? In the course of the analysis attempt is made to explore the answers to some of these questions. This article is structured as follows. Section 1 analyzes the importance of mutual funds in the portfolio of the investor vis-à -vis other competing financial products. This section also looks at the international experience in this regard. Section 2 deliberates on the issues relating to regulation of the mutual fund industry. Section 3 analyzes the salient features of the growth of the industry over the last ten years. Using tenure based classification and investment objective based classification, this section will concentrate on relative performance of various types of mutual funds (open ended, closed ended, equity oriented etc.) in asset mobilization, geographical penetration etc. It also looks at the degree of concentration in the industry in the last four years. Section 4 deals with an analysis of the unit holding pattern of mutual funds and investment pattern of mutual funds. Section 5 concludes after flagging various pertinent issues that confront the industry today. Section 1: Status of the mutual fund industry The ratio of mutual funds to total gross household savings, in India, increased from 5.5% in 1993-94 to 7.9% in 2007-08. Over the same period share of deposits with banks have increased from 27.3% to 54.9%, share of insurance funds has increased from 8.7% to 20.1% and pension funds down from 16.7% to 9.5%. * The author is Deputy Director, Ministry of Finance. He would like to acknowledge that discussion with Dr. K.P.Krishnan Joint Secretary, Ministry of Finance, Mr. CKG Nair Director in Ministry of Finance and Mr. Parag Parikh, Chairman Parag Parikh Financial Advisory Services were helpful in writing this article. Views expressed are personal. 1

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Table 1 (at annex) shows the distribution of gross financial saving of the household sector. It shows that, compared to deposits with banks, small savings schemes and insurance funds, stock markets in general and mutual funds in particular have fared poorly. Only a small proportion of household savings goes into equities and debentures- 0.8% of GDP and about 12% of gross financial savings (2007-08). Per contra, 48% of household savings in the United States have exposure to mutual funds. From the further discussion to follow will see whether the household sector has failed the mutual funds or is it the obverse. The share of mutual funds as a percentage of GDP is 67% in USA and 83% in Australia. Again the contribution of mutual funds to the growth of capital markets measured on the basis of mutual fund assets as a percentage of market capitalization is 10% for India compared to 28% for UK, 81% for Brazil, 76% for France, 104% for USA, and 123% for Australia. However the mutual fund industry is growing at a much higher rate in India as compared to the other major countries. The Compound Annual Growth Rate over a period of ten years for mutual fund industry in India is 22% as compared to USA (5.7%), UK (6.6%), France (9.8%) and Australia (11%). This shows the tremendous scope and potential for growth of mutual funds in India. Section 2: Regulation of Mutual Fund Industry The industry is fully regulated by SEBI and governed broadly by the comprehensive SEBI Mutual Funds Regulations 1993. Prior to SEBI taking over the reins of the industry, mutual funds were regulated through guidelines of the Ministry of Finance and RBI. Sadhak (2003) argues that there were no regulatory guidelines for the mutual fund industry till the first such guidelines were issued by RBI in 1989 for mutual funds floated by banks. The Ministry guidelines empowered RBI to be the regulator of Money Market Mutual Funds (MMMFs) set up by banks. These guidelines, inter-alia set precedence for regulation by entity rather than regulation by domain. The regulation also overlooked the inherent conflict of interest that the central bank would face in developing the money market (and indirectly its participants including MMMFs) and the competition MMMFs could potentially pose to banks. The implications of this conflict of interest have been comprehensively examined by Roy (2005). In short, guidelines relating to lock –ins, minimum maturity periods for MMMFs etc ensured that banks do not face undue pressure. The Ministry guidelines also designated SEBI as the regulator of MMMFs floated by non bank mutual funds. Coordination of regulations issued by the two regulators was ensured by requiring SEBI’s guidelines for MMMFs to be in conformity with those issued by RBI. Dual parentage of mutual fund industry ended in 2000 when all mutual funds were brought under regulatory jurisdiction of SEBI. Over the years regulations have been strengthened and streamlined by SEBI, often as a response to market crisis to develop the market and protect the interests of the investors. The twin strands of reforms initiated by SEBI are stricter prudential norms (restricting parking of funds in short term deposits, stipulating stricter guideline for advertisements, removing discrimination on levy of exit loads etc.) and deregulation of operating environment (raising aggregate industry wise ceiling for overseas investments by mutual funds in ADR, GDR, foreign security, overseas ETF; enabling shortselling etc). Section 3: Growth of the industry Over the last 40 years the mutual fund industry has seen impressive growth. The Asset Under Management of mutual funds increased from Rs.18 crore in 1970-71 to Rs. 1, 53,802 crore in 2007-08. Since 1994 the number of mutual funds has increased from 12 to 43 in 2008-09.

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The trend in gross resource mobilization by public sector mutual funds, private sector mutual funds and UTI since 1993-94 may be seen in Table 2. The importance of UTI has declined since 2000 while the private sector mutual funds have rapidly increased their share. Mutual funds are classified based on tenure (open ended or closed ended) and also according to investment objectives (like equity oriented, debt oriented, balanced, sector specific, exchange traded, fund of funds etc). The total number of schemes (excluding ETFs and fund of funds) offered by mutual fund houses have increased from 394 in 2000-01 to 974 in 2008-09. Table 3 gives an overview of the various types of mutual fund schemes classified both according to tenure and investment objectives. It is a debatable issue whether in a mutual fund scheme the investor should be given the option of free exit or should he require getting himself replaced by another as in the case of a share of a company (Sethu 2006). Thus an open ended scheme treats the investor as a “customer” while a closed ended scheme treats him as a “shareholder”. Table 3 shows that the proportion of open ended schemes increased from 63% in 2000-01 to 90% in 2004-05. Since 2005-06 the proportion of open ended schemes has declined from 78% to 58% in 2008-09. While it is true that fund houses have offered various tailor made schemes to suit risk return profile of a wide spectrum of investors it still appears that there are too many very similar kind of schemes. Perhaps to bring in more discipline it may be worth considering a suggestion made by Dr. Tarapore of linking the number of schemes to net owned funds (Tarapore 2009). The decision whether to let a particular fund grow larger or to start a new fund should not be guided by the differential between the commission on new funds and trail commission on existing ones.

From Table 4 it is seen that more than 75% of the asset base of the mutual fund lies in debt schemes, with

equity oriented schemes accounting for about 20%, the balance left for hybrid schemes. Money market mutual funds (MMMFs) are defined in SEBI regulations as “a scheme of a mutual fund which has been set up with the objective of investing exclusively in money market instruments” where money market instruments includes “commercial papers (CP), commercial bills, treasury bills, Government securities having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills, and any other like instruments as specified by the Reserve Bank of India from time to time”. The advantage of MMMFs

is that they enable a retail investor ( who do not have easy ac-

cess to T-Bill , call lending, CP, either due to high denomination or lengthy , cumbersome procedures) to enjoy money market yields . It may be noted from Table 5 that the implicit cut off yield on 91 day treasury bills as well as average weighted call/ notice money (proxy for money market yields) rate is far higher than savings bank deposit rates. As seen from Table 5 AUM, under liquid /MMMF as a proportion of AUM under all debt oriented funds has consistently increased from 7% in 2000-01 to 51% 2004-05. The decline since 2004-05 could be attributed to the Bull Run in the equity market as captured by Nifty. Despite the large number of mutual fund houses, the top five mutual fund houses account for 56% of the AUM whereas the top ten mutual fund houses account for as much as 78% of AUM in 2009. There is counterintuitive evidence of increasing concentration despite increase in number of players as seen from Table 6. The spatial distribution of Mutual Funds Investors is very skewed towards urban areas. As can be seen from Table 7, 71% of Mutual Fund investors accounting for 86% of net assets of Mutual Funds belong to urban areas. Public Sector Mutual Funds have a relatively greater penetration in rural areas.

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Section 4: Unit Holding and Investment Pattern of Mutual Funds An analysis unit holding pattern of Mutual funds (Table 8) shows that the retail investors for whom Mutual Funds were expected to be the primary investment vehicle, hold only 37% of total net assets of Mutual Funds industry. In contrast, the corporates hold around 56% of net assets. The situation is slightly better for Public Sector Mutual Funds where retail investor have 41% share of net assets. Table 9 shows Asset Under Management held by various categories of investors in liquid, debt oriented, equity oriented and balanced funds. It is seen that retails investors account for just 0.75% of total AUM in liquid and money market Mutual Funds. Thus despite the fact that there has been a significant expansion of AUM under liquid and MMMFs as seen from Table 4.4, retail investment has been marginal. The corporate driven nature of MMMFs is clear from the fact that though MMMFs were allowed since 1992, they were floated only when corporate were eligible to invest in 1996-97(Roy 2005).

The primary objective of

introducing MMMFs to allow retail participation in money markets remains largely unfulfilled. For debt oriented funds, retail investors accounted for 4% of total AUM. In contrast, retail participation is as high as 65% in equity oriented funds and 68% in balanced funds. The high share of corporate in debt oriented funds could possibly be traced the scope for tax arbitrage. One way of tackling this lopsided distribution of AUM could be to designate some schemes exclusively for retail (Tarapore 2009). A study was done to analyze the investment pattern of top ten schemes of top ten mutual funds based on AUM for the month of May 2009. The results are summarized in Table 10. It is seen that mutual funds invest a significant portion of their portfolio in banks and financial sector. Tables 9 and 10 point at a disturbing trend of excessive concentration, both from subscription side and investment side. Excessive concentration on subscription side can create pressure leading to biased investment decisions which may not be in the interests of minority retail holders. During the recent liquidity crisis, huge withdrawals by corporate from money market mutual funds created serious liquidity issues for the mutual funds. In any market heterogeneity amongst investors is a desired quality as it lowers market volatility. When all players are similar in style and approach then there are liquidity ‘black holes’ wherein all are buyers or sellers at the same time. Thus, by having different kinds of investors one can decrease the volatility in the market. Similarly excessive concentration on investment side may create extreme volatility in NAV. We should not forget the pitfalls of excessive concentration in few sectors as one of the many lessons learnt from the US 64 scam. In heady days of raging bull market it would be prudent to remember that those who do not learn from history are condemned to repeat it. The direct result of the concentration of corporates in asset base of the mutual funds was the major redemption pressure faced by mutual funds during October, 2008 as a direct fall out of the liquidity crisis. While the average daily redemption in the early period of October, 2008 was around two thousand crore, it rose to around five thousand crore during mid October. In contrast, though pullouts from equity funds did pick up a little after January 2008 corrections, they declined gradually and remained low thereafter.

Even in October 2008 when the market crashed after the collapse of Lehman Brothers in September,

redemption pressure from retail investors was low even as new fund inflow dropped. According to media reports investors took out only Rs.2652 crore in October 2008 compared to Rs.7536 crore in January 2008 when the market peaked. Retail investors have thus emerged as a more stable investor entity than corporates.

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Poor credit offtake had prompted banks to park their funds in Mutual Funds. This is profitable for banks as they get a return of 4.5% to 5% by investing their surplus funds in liquid schemes of Mutual Funds as compared to 3.25% available from RBI’s reverse repo window. There is however a very high concentration risk to which the Mutual Funds get exposed if few big investors of the same class contribute a major portion of the funds. The Mutual Fund portfolio will get adversely affected if a significant chunk of the current investment is redeemed, once credit offtake begins. Since all banks have similar risk profile it is likely that if one bank redeems, others will soon follow suit. High concentration of homogenous investors is thus risky whether it is corporate or banks. In particular, media reports of ‘round tripping’ involving funds mobilized by banks and mutual funds needs to be looked into. If it is the case that banks are parking their funds with mutual funds who are in turn subscribing to their equities, then it poses serious risk of systemic stability as well. Section 5: Conclusion Besides concentration of portfolio some other issues requiring attention are as follows. Churning of portfolios- while it is difficult to determine the optimum level of churning some funds undertake excessive level of churning. It is the duty of the trustees to check that such churning is in the interest of the investors. Media reports speak of schemes where churning is as high as 20 times making the mutual fund look more like a trader than a long term investor (Tarapore, 2009). This is all the more important in view of empirical evidence* and theoretical research that shows it is difficult to consistently beat the market. Issues relating to governance of mutual funds- To ensure that serious players operate in the market, the capital requirement and fit and proper criteria may be more stringent. To begin with the regulatory capital required for an Asset Management Company (AMC ) may be gradually raised from the current level of Rs. 10 crore. Remuneration of the trustee needs to be commensurate with their duties and responsibilities. Further trustees need to be possess necessary educational qualifications and experience to discharge their responsibility. To address issues of conflict of interest high Chinese walls need to exist among sponsors, trustees and AMCs. Greater disclosures -Greater disclosure of information regarding churning of portfolio should be made available. There should be an upper bound to churning and churning in excess of the prescribed level should be ratified by trustees. SEBI has recently decided to migrate from the system of fixed commission to mutual fund agents and replacing the same by a system of fee paid by investors based on the investor advice. The distributors are also required to disclose all the commissions in the form of trail commission or any other mode payable to them for all the different schemes of different mutual funds. Our markets are passing through turbulent times. While the pace differs growth has slowed down everywhere. Inflationary pressures are likely to become strong given the failure of monsoon. However the long run growth story for India is intact. Mutual funds would have to strive to gain a greater share of the financial savings of the households by penetrating hitherto uncharted areas. This will be a win-win model for both the investors and mutual funds. As discussed earlier mutual funds have the potential to grow fast. *According to Efficient Market Hypothesis in an efficient market actual prices of individual securities already reflect the effects of information based both on events that have already occurred and on events which as of now, the market expects to take place in the future. The implication is that in the long run active fund management is not likely to provide a premium over random stock selec5 tion. The solution according to proponents of this theory is to invest in broad based index funds.

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However the beacon light is this long journey should be ethics and good governance. This should be the unique selling proposition of mutual funds. Even as mutual funds operate in a competitive market environment, as systemically important institution they are expected to be responsible risk takers balancing their private gain with fiduciary responsibility of loyalty, trust and competence. Mutual fund industry needs to stress on financial inclusion. Financial inclusion is just not access to financial resources; it also considers ease of access. Without dithering further the industry should strengthen their distribution network by evolving innovative business models leveraging the distributional network of post office, banks etc. financial innovation should not be financial circumvention. The objective of the industry to self regulates itself by adopting checks and balances to manage and eliminate conflicts of interest wherever they exist. According to a British Parliamentarian of the bygone era, the measure of a man’s real character is what he would do if he knew he would never be found out. This is the test which the financial industry in general and mutual fund industry in particular should apply to themselves.

Bibliography :

1. New Commonsense Guide to Mutual Funds, Mary Rowland, Vision Books 2. All about Mutual Funds, Bruce Jacobs, Mc Graw Hill company. 3. The winning Portfolio, How to choose best Mutual funds, Paul B. Farell, Vision Books. 4. Mutual Funds in India-Marketing Strategies and Investment Practices, H. Sadhak, Sage Publications. 5. Mutual Fund Masters: A Revealing Look Into the Minds and Strategies of Wall Street's Best and Brightest by Bill Griffeth (Hardcover - Dec 1994)

6. Governance of Mutual funds and Institution of Trustee, G. Sethu, Economic and Political Weekly, April 15, 2006. 7. Money Market Mutual Funds, A macro perspective, S. Manjesh Roy, Economic and Political Weekly, March 19, 2006. 8. Taxation and Capital Market Developments, M.K. Daktar, Economic and Political Weekly, July 29, 2000. 9. Plain Truths about Mutual Funds, Debashis, Basu, Kensource 2006.. 10. India’s Financial Markets: An insiders view to how the market work, Ajay Shah, et.al, Academic Press. 11. Stocks to Riches, Parag Parikh, Tata Mc Graw Hill. 12.

Mutual Funds: Need for Reforms, S. S. Tarapore, Business Line, 24. 06. 2009.

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ANNEX Table 1: Distribution of financial savings of the household sector. (As percent to total financial savings) Deposits with

Shares & debentures1

Units of UTI

Units of mutual

Small savings

Insurance funds

Provident and pen-

1993-94

27.3

13.5

4.3

1.2

5.9

8.7

16.7

1994-95 1995-96

35.3 26.3

11.9 7.3

2.7 0.2

1.1 0.3

9.0 7.4

7.8 11.2

14.7 18.0

1996-97

25.7

6.6

2.4

0.3

7.0

10.2

19.2

1997-98

37.8

2.9

0.3

1.1

11.3

11.3

18.8

1998-99

33.7

3.4

0.9

0.8

13.0

11.3

22.4

1999-00

30.8

7.7

0.8

3.4

11.3

12.1

22.8

2000-01

32.5

4.1

-0.4

1.3

14.0

13.6

19.3

2001-02

35.3

2.7

-0.6

1.8

12.1

14.2

16.10

2002-03

35.5

1.7

-0.5

1.3

14.9

16.1

15.0

2003-04

37.4

0.1

-2.3

1.2

15.5

13.7

13.6

2004-05

36.4

1.1

-0.7

0.4

19.5

16.0

12.9

2005-06

46.7

4.9

-0.1

3.6

12.2

14.2

10.5

2006-07

47.8

9.0

0.0

5.3

2.7

17.7

11.1

50.4

12.4

0.0

7.9

-1.9

18.0

9.9

54.9

2.6

-0.4

-1.4

1.4

20.1

9.5

Year

2007-08 2008-09

#

Notes: 1. Includes units of UTI and mutual funds; 2. Other than UTI ; # Provisional Source: Annual Report of RBI, various issues.

Table. 2: Trends in resource mobilization by Mutual Funds (in %) Year 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Private Sector

Public Sector

UTI

Total

2.49 15.18 4.79 7.24 17.3 34.59 71.39 80.69 89.83 90.27 90.58 87.7 83.29 82.53 84.68

15.34 15.61 4.54 3.16 2.91 7.35 6.23 5.95 7.34 7.47 5.34 6.73 10.04 10.12 7.75

82.15 69.2 90.65 89.59 79.78 58.09 22.36 13.35 2.82 2.25 4.06 5.55 6.65 7.33 7.55

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Source: SEBI Handbook of Statistics on the Indian Securities Markets 2008

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Table 3: Status of mutual fund industry in India 2000-01 to 2008-09 Year

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09

open closed open closed open closed open closed open closed open closed open closed open closed open closed

Number of Income/ debt oriented funds (including gilt funds)

Per cent to total

Number of Equity and growth oriented schemes including ELSS1

Per cent to total

Number of Balanced funds

Per cent to total

Total

114 61 156 49 168 34 186 11 200 27 213 112 216 234 297 296 253 280

29 15 37 12 41 8 46 3 44 6 36 19 29 31 31 31 26 29

110 77 120 58 135 33 143 26 169 19 216 15 235 32 251 62 279 59

28 20 29 14 33 8 35 6 38 4 36 3 31 4 27 7 29 6

28 4 31 3 34 2 34 3 34 1 34 2 34 4 31 6 30 5

7 1 7 1 8 0 8 1 8 0 6 0 5 1 3 1 3 1

394 417 406 403 450 592 755 943 974

Note: 1. Equity Linked Savings Scheme Source : Calculated using data from SEBI website.

Table 4 : AUM under various schemes as a percent to annual average net AUM Year

Income/ debt oriented funds (including gilt, liquid

Equity and growth oriented schemes including ELSS

Balanced funds

2000-01

61

18

21

2001-02

68

16

17

2002-03

74

13

13

2003-04

79

18

3

2004-05

71

26

3

2005-06

54

43

3

2006-07

63

34

3

2007-08

64

33

3

2008-09

77

21

2

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Table 5: AUM under liquid/MMMFs Year

AUM under liquid/MMMF as a percentage of

S&P CNX Nifty Index

Average call/notice money rate

Savings Account deposit rate.

Implicit cutoff yield of 91 day Treasury Bills

AUM under income / debt oriented schemes1

average annual net AUM

2000-01

7

5

1148.2

9.15

4

8.98

2001-02

12

8

1129.6

7.16

4

6.88

2002-03

17

13

978.2

5.89

3.5

5.73

2003-04

38

30

1771.9

4.33

3.5

4.63

2004-05

51

36

2035.7

4.55

3.5

4.89

2005-06

49

27

3402.6

5.36

3.5

5.51

2006-07

44

28

3821.6

7.22

3.5

6.8

2007-08

30

19

4734.5

6.07

3.5

7.11

2008-09

33

25

3021.0

7.06

3.5

6.96

Note : 1. Debt oriented schemes include besides MMMFs gilt funds, debt funds offering assured returns and those not offering assured returns. Source: Compiled from data collected from SEBI website, various issues of Annual reports of RBI, NSE website.

Table 6: Market share of top ten and top five mutual funds based on AUM 2006

2007

2008

2009

Number of mutual funds

31

34

37

43

Market share of top five mutual funds as % of AUM Market share of top ten mutual funds as % of AUM

49

52

52

56

75

74

73

78

Source: Calculated using data from AMFI (Association of Mtutal Funds of India) website

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Table 7: Rural urban distribution of mutual fund investors and investment Per cent of total investors Urban areas

71

Per cent of total net assets 86

Rural/ Other areas

29

14

Urban areas

61

70

Rural/ Other areas

39

30

Urban areas

73

88

Rural/ Other areas

27

12

Urban areas

76

86

Rural/ Other areas

24

14

All mutual funds Public sector mutual funds

Private sector mutual funds

Top ten mutual funds

Note: Figures given in the table above are calculated using data collected from 35 active mutual funds as on June 30, 2008. Public sector mutual funds include UTI mutual fund, SBI mutual fund, LIC mutual fund and Canara Robeco mutual fund.

Source: SEBI Table 8: Unit holding pattern of mutual funds on ownership basis (As on March 2009) Investor Classification

Per cent of total investor account (Per cent of total net assets)

96.75 (37.03)

Public sector mutual funds 97.82 (41.01)

Private sector mutual funds 96.21(36.06)

NRIs

2.04 (5.44)

0.99 (2.11)

2.58 (6.25)

FIIs

0.00 (1.19)

0.00 (0.12)

0.00 (1.45)

Corporate / Institutions/ others

1.21 (56.34)

1.20 (56.76)

1.22 (56.23)

Mutual fund industry Retail

Source.: Complied using data collected from SEBI website.

Table 9 : Unitholding pattern of various schemes of mutual funds classified as per investment objective (As on March 2009) Per cent of AUM Investor Classification

Liquid / Money market mutual funds

Debt oriented funds including gilt funds

Equity oriented funds

Balanced funds

Corporate

73.65

63.47

12.07

9.09

Banks/ FIs

16.15

1.56

1.70

0.45

FIIs

1.60

0.62

0.76

0.01

High net worth individuals Retail

7.86

30.34

20.63

22.23

0.75

4.0

64.84

68.21

Source: SEBI

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Table 10: Investment pattern of top ten schemes1 of top ten mutual funds based on AUM (as on May 2009) Mutual Funds

1*

2*

3*

4*

5*

6*

7*

8*

9*

10*

%of total AUM accounted for by top 10 schemes

81

84

86

77

79

78

96

90

65

80

Banks

36.

19

37

59

54

35

19

47

22

40

Finance

15

41

11

9

18

7

41

21

23

21

Central govt. securities Current asset

6

0

12

0

11

13

0

15

0

6

20

16

21

10

0

6

16

10

5

15

Others2

23

24

56

81

71

26

24

7

50

18

Total

100

100

100

100

100

100

100

100

100

100

Sectors

Notes: 1

Includes equity oriented, debt oriented and balanced schemes.

2

Includes sectors such has auto, consumer durables and non durables, telecom, construction, pharmaceuticals, power, industrial capital goods, textile , travel, software and hardware etc. * 1. Reliance Mutual Fund

2. HDFC Mutual Fund

3. ICICI Prudential Mutual Fund

4. UTI Mutual Fund

5. Birla Sunlife

6.

7. LIC Mutual Fund

8. Kotak Mahindra Mutual Fund

9. Franklin Templeton Mutual Fund

10. Tata Mutual Fund

SBI Mutual Fund

Source: Report submitted by Ms. Bhawna Joshi to Ministry of Finance for her internship. Data was collected from Newswire and individual AMCs through AMFI.

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