What isMutual Funds

                                                                                Mutual Funds
Money Indian Economy 
What is Mutual fund? 

is a financial institution established as a trust. Develops a variety of investment plans and sell units to those who invest in it. The amount deposited in the units from the sale of units is invested in shares, debentures, bonds, etc. of the stock market companies. The dividend payable to the unit holder is given to the mutual fund through this investment.

What Types of Mutual Funds ?

1) Equity funds

2) Debt Funds

3) Hybrid funds

4) Money market funds

Equity funds: - Funds investing in equities and shares are called equity funds.

Debt Funds: - Funds are investing in bond securities are called debt funds.

Hybrid Funds: - Funds investing in both stock and bond securities are called hybrid funds.

Money Market Funds: - Funds investing in money markets are called money market funds.these are short term fund.

History of Mutual Funds

The first mutual fund in the world was established in 1822 in Belgium . In 1868 "Foreign and Colonial Government Trust" mutual fund was established in England. In the early 20th century, the concept of Mutual Fund was spread across America. In the United States, three mutual funds were set up in 1924. During the second world war, mutual funds increased significantly.

Development of Mutual Funds in India: -

On July 1, 1964, the first Mutual Fund Unit Trust of India was established in the public sector in India. After that, only UTI was working in India for the last 23 years.
In 1987, the government allowed public banks to set up funds in the mutual fund sector. 1987 " SBI Mutual Fund" is the second mutual fund of India. After that many public banks have set up mutual funds. For example, Canara Bank, Punjab National Bank, LIC, etc.
On the 14th of February, 1992, the Government opened the private sector to set up a mutual fund to see the increase in the funding of the mutual fund industry.

In 1993,r Kothari Pioneer, the private sector's first mutual fund, was formed.

In 1994, Morgan Stanley was the first foreign mutual fund comes in India.

The Association of Mutual Funds in India (AMFI) was established in 1995 for Self Regulation to finance the mutual fund industry.

Unit Trust of India (UTI)

Under the initiative of the then finance minister T.T. Krishnamachari, the UTI Act -1963 was passed. The work of UTI started on 1st July, 1964. On the same day, UTI started selling the largest plan (US -64) units.

UTI was established for the two major objectives

1) Collect savings by encouraging people to save between medium and low-income groups.

2) Similarly of giving industrial benefits to the people in the country.

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