Abstract

Mutual Fund was introduced in the year 1963 in India. UTI is the first concern to deal
with mutual fund in India. The performance of mutual fund started going high after
liberalization in the country. Mutual Fund came into existence in India in the year 1963.
Unit trust of India was the first association to launch the concept of Mutual Fund in India. It
invited a lot of investors to invest in UTI Mutual Funds in order to make savings. UTI
Mutual Fund ruled India for around 30 years and there were no competitors till 1988 when
some new mutual fund companies came into existence.

In spite of this, UTI Mutual Fund had always remained in the leading position. The
performance of Mutual Funds in India started climbing the ladder of success with the
consistently good performance of UTI Mutual Fund. Initially, people in India were not very
much familiar with the Mutual Funds. In the year 1992, that is, in the post-liberalization era
around 24 million shareholders or investors in the UTI Mutual Fund were assured high
returns on investing in Mutual Funds. UTI Mutual Funds schemes actually sold the idea of
getting benefited by investing in mutual funds to the Indian population which proved to be a
successful measure in attracting investors. There was 0% risks involved in mutual funds
schemes after liberalization and the number of investors started increasing rapidly thereafter.

The Assets Under Management of UTI Mutual Fund stood at Rs. 67 billion by the
end of the year 1987. It rose to Rs. 470 billion in March 1993 and by April 2004, the figure
reached thrice the amount of March 1993 and stood at Rs. 1,540 billion. The net asset value
(NAV) of mutual funds started to go down with the falling of share prices in 1992. Portfolio
shifts were not allowed into alternative investments during the crisis period. The closed-end
funds were floated in the Indian market at that time which made the investors sell the shares
at a loss in the secondary market.

The performance of mutual funds in India went through a lot of turmoil especially in
the year 1992 when there was a terrible decline in the stock prices. Losses were faced by the
investors while disinvesting in the secondary market and the rules and regulations were not
clear enough to rule out the ambiguity in the minds of investors regarding investment in
mutual funds in India. The current trading value is 1020 percent discount on the net asset
value of the mutual funds.