Mutual Funds Performance in India

Mutual funds started in India in 1963, and since then it has grown to a major investment opportunity for small investors who would like to start investing but have initial jitters about risk management.

The performance of mutual fund in India has been phenomenal. It started with just one company, offering mutual funds, the venerable Unit Trust of India (UTI), and has blossomed to an industry with major international players all working to make a big bucks today.

In the beginning, mutual funds was seen as a losing investment. Very few people in India wanted to even consider it. For the majority, it was better to keep their money closer and more easily available to them, than in a fund that they could not touch.

At that time, India was also not growing economically which would account for the hesitation. Money was not easily earned, and thus for the majority, investing was not even an option.

In the past few years though, India has emerged as a potential giant in the international economic arena. With the huge success in the computer industry, and in the consumer relations, call centers, and pharmaceutical business, to name just a few, India is fast becoming a country to watch, along with China.

With this renewed vigor in India, opportunities started to pour in and investors and large multinationals started to set up shop. This lead to a boost in the local financial market, and with this, the mutual funds.

The performance of mutual funds is now on a high, and expectations are upbeat that the market will continue to surge forward. Aside from local businesses doing extremely well, credit should be also given to the government for regulating the industry and making it more consumer friendly.

There are now tax breaks and protection for small investors that were not there in the early years of mutual funds. This has attracted more investors to take the risk since the amount of investment will depend totally on the investor.

Of course, this industry is not without its problems, and it has gone through many in its history. However, all that is part of the colorful past of mutual funds in India, and today, with the regulating body set in place to oversee every investment, there is more transparency which creates better consumer confidence and trust.

Similarly, a beginner in the mutual funds investment arena can select from several schemes to start with. With the foundation in place, it is expected that mutual funds in India will continue to grow and prosper. As long as the fund managers offer a range of opportunities wherein investors can decide their risk exposure, then there should be no false expectations.

As in any investment opportunity or move, there will be risks, and the only way India can continue its growth is to be upfront and transparent with every investor from the get go. An entire industry can collapse if just one company fails to do this. Hopefully India never gets to this point.

Quote of the Day:
In the current macroeconomic environment, we believe volatility has taken UTIthe center stage. With uncertainty on macro-economic front, as a starting point, we try to position our fund to tap the opportunities arising out of volatility in the market and do not take secular views. - Mr. Ritesh Jain

Conclusion: The performance of mutual funds in India has to be looked at historically to appreciate how far the country has grown and developed its market.

At present, with the worldwide recession still hanging above many of the nations across the globe, India is managing to keep its head above water. Much of this has to do with the proper regulation of the finance and investment industries.

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