SlideShare a Scribd company logo
1 of 1
Download to read offline
Private mutual funds corner market, edge out state-run firms
July 1st, 2009 - 7:01 pm

New Delhi, July 1 (IANS) Private sector mutual funds are likely to outperform state-owned
funds for the sixth consecutive year, accounting for over 78 percent of the mutual fund market
till May 31, says a report.
“The market share of PSU mutual funds in the overall aggregate AUM (assets under
management) has fallen sharply from 71.77 percent to 21.59 percent during the period between
years 2000 and 2009,” according to a survey by brokerage firm SMC Capitals.

Fortunes of state funds fell rapidly, with majority of the market share being lost during 2000-03.
From a 71.77 percent share with Rs.71,290 crore of AUM in 2000, their share fell to just 23.84
percent with Rs.33,404 crore of AUM in 2003.

This year, state funds have about Rs.138,013 crore under management, while private mutual
funds have Rs.501,117 crore till May 31.

“The splitting of UTI (Unit Trust of India) in the year 2003 has really changed the shape of the
Indian mutual fund industry significantly in favour of private sector,” said the report.

“The UTI fraud, which happened in 2003, was a blow to the already flagging market share of
PSU funds. UTI was split and about Rs.31,000 crore was removed from the AUM,” said SMC
Capitals equity head Jagannadham Thunuguntla.

According to him, state funds, which are primarily owned by banks with huge distribution
channels, failed to capitalise on this strength, while private entrants were more aggressive and
concentrated on increasing their reach by tying up with third-party distributors.

“Any mutual fund person will tell you that distribution is the key to a mutual fund’s success.
PSU funds failed to utilise their existing huge branch network. Private companies were more
aggressive and built an efficient distribution system,” said Thunuguntla.

But all is not lost for state-owned funds. With the Securities and Exchange Board of India
(SEBI) prohibiting mutual funds to levy an entry fee on investments, the private companies may
find it difficult to maintain the same margins.

“PSU funds on the other hand, can utilise their internal distribution network (branches) and
exploit this opportunity,” said Thunuguntla.

More Related Content

Viewers also liked

Viewers also liked (14)

Healthy Federal Guidelines with Joel Kimmons and Melissa Walker
Healthy Federal Guidelines with Joel Kimmons and Melissa WalkerHealthy Federal Guidelines with Joel Kimmons and Melissa Walker
Healthy Federal Guidelines with Joel Kimmons and Melissa Walker
 
They Call it Surfing for a Reason
They Call it Surfing for a ReasonThey Call it Surfing for a Reason
They Call it Surfing for a Reason
 
Vrouwen Binnen De Islaam
Vrouwen Binnen De IslaamVrouwen Binnen De Islaam
Vrouwen Binnen De Islaam
 
MDUUC Wedding Brochure
MDUUC Wedding BrochureMDUUC Wedding Brochure
MDUUC Wedding Brochure
 
E R Negocio creado por ginna...
E R Negocio creado por ginna...E R Negocio creado por ginna...
E R Negocio creado por ginna...
 
Chikungunya
ChikungunyaChikungunya
Chikungunya
 
090424 C S306554(2)
090424 C S306554(2)090424 C S306554(2)
090424 C S306554(2)
 
Neighbourhood action (2)
Neighbourhood action (2)Neighbourhood action (2)
Neighbourhood action (2)
 
SikiöN Kehitysvaiheet Koraanissa Ja Kuvissa _ Finnish
SikiöN Kehitysvaiheet Koraanissa Ja Kuvissa  _ FinnishSikiöN Kehitysvaiheet Koraanissa Ja Kuvissa  _ Finnish
SikiöN Kehitysvaiheet Koraanissa Ja Kuvissa _ Finnish
 
Web Terms Handout
Web Terms HandoutWeb Terms Handout
Web Terms Handout
 
Amex
AmexAmex
Amex
 
The value of coproduction
The value of coproductionThe value of coproduction
The value of coproduction
 
Entrevista a Rafa nadal
Entrevista a Rafa nadalEntrevista a Rafa nadal
Entrevista a Rafa nadal
 
Later People of the Fertile Crescent
Later People of the Fertile CrescentLater People of the Fertile Crescent
Later People of the Fertile Crescent
 

More from Jagannadham Thunuguntla

Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013Jagannadham Thunuguntla
 
Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013Jagannadham Thunuguntla
 

More from Jagannadham Thunuguntla (20)

Financial chronicle 10.05.2014
Financial chronicle 10.05.2014Financial chronicle 10.05.2014
Financial chronicle 10.05.2014
 
The indian express
The indian expressThe indian express
The indian express
 
The financial express
The financial expressThe financial express
The financial express
 
The hindu business line
The hindu business lineThe hindu business line
The hindu business line
 
The asian age
The asian ageThe asian age
The asian age
 
Economic times 28.03.14.
Economic times   28.03.14.Economic times   28.03.14.
Economic times 28.03.14.
 
Economic times 26.03.14.
Economic times   26.03.14.Economic times   26.03.14.
Economic times 26.03.14.
 
Economic times 25.03.14.
Economic times   25.03.14.Economic times   25.03.14.
Economic times 25.03.14.
 
Financial chronicle 03.02.2014
Financial chronicle   03.02.2014Financial chronicle   03.02.2014
Financial chronicle 03.02.2014
 
Business standards 03.02.2014
Business standards   03.02.2014Business standards   03.02.2014
Business standards 03.02.2014
 
Financial chronicle - 31.01.201
Financial chronicle - 31.01.201Financial chronicle - 31.01.201
Financial chronicle - 31.01.201
 
The financial express 07.01.14.
The financial express   07.01.14.The financial express   07.01.14.
The financial express 07.01.14.
 
The business standard 07.01.14.
The business standard   07.01.14.The business standard   07.01.14.
The business standard 07.01.14.
 
Financial chronicle 7.01.14.
Financial chronicle   7.01.14.Financial chronicle   7.01.14.
Financial chronicle 7.01.14.
 
Business Standard 24.12.13
Business Standard 24.12.13Business Standard 24.12.13
Business Standard 24.12.13
 
The Hindu business
The Hindu businessThe Hindu business
The Hindu business
 
Hindu 17.12.13
Hindu 17.12.13Hindu 17.12.13
Hindu 17.12.13
 
Hindu 17.12.2013
Hindu 17.12.2013Hindu 17.12.2013
Hindu 17.12.2013
 
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
Infra cos pay over $1 billion in finance, interest costs in H1 - 25.11.2013
 
Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013Initial offers fail investors- 25.11.2013
Initial offers fail investors- 25.11.2013
 

Recently uploaded

Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingHenry Tapper
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024Neil Day
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources PresentationAdnet Communications
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfAdnet Communications
 
Pitch Ogloba Feb 2nd 2024 .pptx
Pitch Ogloba Feb 2nd 2024           .pptxPitch Ogloba Feb 2nd 2024           .pptx
Pitch Ogloba Feb 2nd 2024 .pptxFinTech Belgium
 
Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...
Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...
Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...mwangimwangi222
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESKumarJayaraman3
 
2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf
2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf
2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdfHenry Tapper
 
IMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTAN
IMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTANIMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTAN
IMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTANindexPub
 
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAMZakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAMFaisal834049
 
Press release from the BP Pensioner Group on the WPC DB report
Press release from the BP Pensioner Group on the WPC DB reportPress release from the BP Pensioner Group on the WPC DB report
Press release from the BP Pensioner Group on the WPC DB reportHenry Tapper
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklosbeduinpower135
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTindexPub
 
GCF - Our added Value in Cosmetics & Fragrances sector 0324.pdf
GCF - Our added Value in Cosmetics & Fragrances sector 0324.pdfGCF - Our added Value in Cosmetics & Fragrances sector 0324.pdf
GCF - Our added Value in Cosmetics & Fragrances sector 0324.pdfHugoNaour
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.KumarJayaraman3
 
259267537-CLASSES-OF-INSURANCEsj-pdf.pdf
259267537-CLASSES-OF-INSURANCEsj-pdf.pdf259267537-CLASSES-OF-INSURANCEsj-pdf.pdf
259267537-CLASSES-OF-INSURANCEsj-pdf.pdfnassorokayanda9412
 

Recently uploaded (20)

Work and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB fundingWork and Pensions report into UK corporate DB funding
Work and Pensions report into UK corporate DB funding
 
bbbd1002
bbbd1002bbbd1002
bbbd1002
 
The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024The CBR Covered Bond Investor Roundtable 2024
The CBR Covered Bond Investor Roundtable 2024
 
Effects & Policies Of Bank Consolidation
Effects & Policies Of Bank ConsolidationEffects & Policies Of Bank Consolidation
Effects & Policies Of Bank Consolidation
 
E-levy and Merchant Payment Exemption in Ghana
E-levy and Merchant Payment Exemption in GhanaE-levy and Merchant Payment Exemption in Ghana
E-levy and Merchant Payment Exemption in Ghana
 
2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation2024.03 Strategic Resources Presentation
2024.03 Strategic Resources Presentation
 
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdfLundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
Lundin Gold March 2024 Corporate Presentation - PDAC v1.pdf
 
Pitch Ogloba Feb 2nd 2024 .pptx
Pitch Ogloba Feb 2nd 2024           .pptxPitch Ogloba Feb 2nd 2024           .pptx
Pitch Ogloba Feb 2nd 2024 .pptx
 
Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...
Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...
Solution Manual For Accounting 28th Edition by Carl S. Warren, Christine Joni...
 
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTESACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
ACCOUNTING FOR BUSINESS.II BRANCH ACCOUNTS NOTES
 
2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf
2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf
2024-3-29 - PR Newswire - Federal Judge Says BP Must Reform its Pension Plan.pdf
 
IMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTAN
IMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTANIMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTAN
IMPACT OF MICROFINANCE ON POVERTY REDUCTION IN SOUTHERN PUNJAB PAKISTAN
 
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAMZakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
Zakat and it’s Social Benefits - THE FORGOTTEN PILLAR OF ISLAM
 
Press release from the BP Pensioner Group on the WPC DB report
Press release from the BP Pensioner Group on the WPC DB reportPress release from the BP Pensioner Group on the WPC DB report
Press release from the BP Pensioner Group on the WPC DB report
 
Hungarys economy made by Robert Miklos
Hungarys economy   made by Robert MiklosHungarys economy   made by Robert Miklos
Hungarys economy made by Robert Miklos
 
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINTACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
ACADEMIC BANK OF CREDIT: A WORLDWIDE VIEWPOINT
 
GCF - Our added Value in Cosmetics & Fragrances sector 0324.pdf
GCF - Our added Value in Cosmetics & Fragrances sector 0324.pdfGCF - Our added Value in Cosmetics & Fragrances sector 0324.pdf
GCF - Our added Value in Cosmetics & Fragrances sector 0324.pdf
 
Mobile Money Taxes: Knowledge, Perceptions and Politics: The Case of Ghana
Mobile Money Taxes: Knowledge, Perceptions and Politics: The Case of GhanaMobile Money Taxes: Knowledge, Perceptions and Politics: The Case of Ghana
Mobile Money Taxes: Knowledge, Perceptions and Politics: The Case of Ghana
 
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
ACCOUNTING FOR BUSINESS.II DEPARTMENTAL ACCOUNTS.
 
259267537-CLASSES-OF-INSURANCEsj-pdf.pdf
259267537-CLASSES-OF-INSURANCEsj-pdf.pdf259267537-CLASSES-OF-INSURANCEsj-pdf.pdf
259267537-CLASSES-OF-INSURANCEsj-pdf.pdf
 

India Forums July 2, 2009 Private Mutual Funds Corner Market, Edge Out State Run Firms

  • 1. Private mutual funds corner market, edge out state-run firms July 1st, 2009 - 7:01 pm New Delhi, July 1 (IANS) Private sector mutual funds are likely to outperform state-owned funds for the sixth consecutive year, accounting for over 78 percent of the mutual fund market till May 31, says a report. “The market share of PSU mutual funds in the overall aggregate AUM (assets under management) has fallen sharply from 71.77 percent to 21.59 percent during the period between years 2000 and 2009,” according to a survey by brokerage firm SMC Capitals. Fortunes of state funds fell rapidly, with majority of the market share being lost during 2000-03. From a 71.77 percent share with Rs.71,290 crore of AUM in 2000, their share fell to just 23.84 percent with Rs.33,404 crore of AUM in 2003. This year, state funds have about Rs.138,013 crore under management, while private mutual funds have Rs.501,117 crore till May 31. “The splitting of UTI (Unit Trust of India) in the year 2003 has really changed the shape of the Indian mutual fund industry significantly in favour of private sector,” said the report. “The UTI fraud, which happened in 2003, was a blow to the already flagging market share of PSU funds. UTI was split and about Rs.31,000 crore was removed from the AUM,” said SMC Capitals equity head Jagannadham Thunuguntla. According to him, state funds, which are primarily owned by banks with huge distribution channels, failed to capitalise on this strength, while private entrants were more aggressive and concentrated on increasing their reach by tying up with third-party distributors. “Any mutual fund person will tell you that distribution is the key to a mutual fund’s success. PSU funds failed to utilise their existing huge branch network. Private companies were more aggressive and built an efficient distribution system,” said Thunuguntla. But all is not lost for state-owned funds. With the Securities and Exchange Board of India (SEBI) prohibiting mutual funds to levy an entry fee on investments, the private companies may find it difficult to maintain the same margins. “PSU funds on the other hand, can utilise their internal distribution network (branches) and exploit this opportunity,” said Thunuguntla.