Top Banner
ASSOCIATION OF MUTUAL FUNDS IN INDIA ASSOCIATION OF MUTUAL FUNDS IN INDIA INDIAN MUTUAL FUND INDUSTRY INDIAN MUTUAL FUND INDUSTRY PRESENTATION BY PRESENTATION BY A.P.KURIAN A.P.KURIAN CHAIRMAN CHAIRMAN
25

5 amfi point

Jul 01, 2015

Download

Documents

avinash9t9
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1: 5 amfi  point

ASSOCIATION OF MUTUAL FUNDS IN INDIAASSOCIATION OF MUTUAL FUNDS IN INDIA

INDIAN MUTUAL FUND INDUSTRYINDIAN MUTUAL FUND INDUSTRY

PRESENTATION BYPRESENTATION BY

A.P.KURIANA.P.KURIAN

CHAIRMANCHAIRMAN

Page 2: 5 amfi  point

145657

47733

134554564126139417225 65

100594

6243070623

90587

103453

79464

0

20000

40000

60000

80000

100000

120000

140000

160000

65 69 74 79 84 87 89 93 94 99 20002001

20022003

'Feb-2004

GROWTH IN ASSETS UNDER MANAGEMENTGROWTH IN ASSETS UNDER MANAGEMENT

Compounded Annual Growth Rate -1965 to Feb 2004. 24.20%

Page 3: 5 amfi  point

M a r c h 1 9 9 3

F e b r u a r y 2 0 0 4

C o m p o u n d e d A n n u a l G r o w t h R a t e ( C A G R ) M a r 1 9 9 3 - F e b 2 0 0 4

1 0 . 6 7 %

G R O W T H O F M U T U A L F U N D A S S E T S

P e r i o dM U T U A L F U N D A S S E T S U N D E R

M A N A G E M E N T

R s . C r o r e s

1 . 4 5 , 6 5 7

4 7 , 7 3 4

Page 4: 5 amfi  point

Estimates of Investors - 1998-99Estimates of Investors - 1998-99

Individuals/Unit Holding Account

Households% to Total Households

Directly investing in equities or debentures

19 m 12.8 m 8%

No. of Unit Holders in Mutual Fund 23m 15 m 9%

Survey of Indian Investors - June 2000

Page 5: 5 amfi  point

UNITHOLDING PATTERN OF MUTUAL FUND UNITHOLDING PATTERN OF MUTUAL FUND INDUSTRY AS ON MARCH 31, 2003INDUSTRY AS ON MARCH 31, 2003

10079,600.8310015,968,854TOTAL

57.1245,469.532.04324,979Corporates/ Institutions/ Others

0.71561.670.012,058FIIs

1.1878.510.5384,311NRIs/OCBs

41.0732,691.1297.4215,557,506Individuals

% To Total Net Asset Value

Net Asset Value

% To Total Investors

(Accounts)

Number Of Investors

(Accounts)

CategoryRs. In Crores

Source: SEBI

Page 6: 5 amfi  point

ASSETS SEGMENTS NO. OF FUNDS

NO. OF SCHEMES (Rs. in

Crores) % to Total

A Bank Sponsored 5 91 27397 19 B Institutions 3 36 7371 5 C Private Sector I Indian 8 69 20714 14 II Foreign 1 13 4044 2

III Joint Ventures - Predominantly Indian

5 72 34132 23

IV Joint Ventures - Predominantly Foreign

9 121 51999 36

Total (I+II+III+IV) 23 275 110889 75 Grand Total (A+B+C) 31 402 145657

SEGMENTWISE COMPOSITION OF MUTUAL FUND SEGMENTWISE COMPOSITION OF MUTUAL FUND INDUSTRY AS ON FEBRUARY 29, 2004INDUSTRY AS ON FEBRUARY 29, 2004

Page 7: 5 amfi  point

Category/Type

No. of Schemes

Assets No. of

SchemesAssets

No. of Schemes

Assets

1 Equity Funds 123 21524 3 1498 126 23022 16 2 Income Funds 119 64571 12 825 131 65396 45 3 Liquid/Money Market 33 45200 - - 33 45200 31 4 Balanced Funds 36 3533 2 790 38 4323 3 5 Gilt Funds 31 5955 - 31 5955 4 6 Tax Saving (ELSS) 19 539 24 1222 43 1761 1

TOTAL 361 141322 41 4335 402 145657

Sr. No.

No. of Schemes and Assets by type and category - February 2004 (Rs. In Crores)

Open-Ended Close-Ended Total% to Total

CATEGORY / TYPE WISE COMPOSITION CATEGORY / TYPE WISE COMPOSITION OF MUTUAL FUND SCHEMESOF MUTUAL FUND SCHEMES

Page 8: 5 amfi  point

CURRENT STATUSCURRENT STATUS

The industry is in the institution building phase – setting highest

professional standards

Enhancing credibility through transparency of operation and frequency of disclosure

Consolidation through mergers and acquisitions [6+2]

Product range – conventional and new generation funds – sector specific, index funds, exchange traded funds, fixed maturity funds, systematic withdrawal, automatic redemption funds etc.

Since end 1999, moved away from assured return schemes

Predominance of non-individual investor base

Heavy concentration of investors from a limited number of cities

Page 9: 5 amfi  point

Emergence of independent research bodies evaluating performance and providing ratings of funds

Generating investor awareness and investor interest in the industry

CURRENT STATUS Contd..

Page 10: 5 amfi  point

REGULATORY FRAMEWORKREGULATORY FRAMEWORK

Well Regulated - Strictly Regulated Industry.

Regulation is comprehensive, sensitive and supportive of healthy development of industry. In most areas it matches with the best internationally.

Pro-active initiatives from the regulator. The Regulation is constantly reviewed and amended periodically. Guidelines on a variety of subjects such as valuation, benchmarking, disclosure issued regularly to match with best practices.

Yearly inspection of all mutual funds – a support to the healthy development.

Page 11: 5 amfi  point

Self regulatory process is in built in Mutual Fund structure and set up.

While Mutual Fund functions in terms of the Trust Deed the AMC functions in terms of the Investment Management Agreement as approved by SEBI.

Separate Auditors for Asset Management Company and for Mutual Fund.

Trustees are first level Regulators.

Their general and specific duties and responsibilities are well spelt out.

REGULATORY FRAMEWORKREGULATORY FRAMEWORK contd..

Page 12: 5 amfi  point

Predominance of independent (2/3rd) trustees - Role of independent Trustees.

Quarterly compliance test and Certification by Trustees.

AMCs to record investment decisions and investment management process.

Partner relationship of SEBI with AMFI close interactive working style

AMFI acts as a catalyst and initiator of many new standards and refinements of systems and procedures.

REGULATORY FRAMEWORKREGULATORY FRAMEWORK contd..

Page 13: 5 amfi  point

IMPROVEMENT IN IMPROVEMENT IN OPERATIONAL AREASOPERATIONAL AREAS

Standard Offer document with comparative data.

Refinement in the Calculation of NAV.

Daily release of NAVs before 8.00 P.M and posting them on AMFI website.

Uniform methodology for Valuation of Non-Traded Securities – debt & equities.

Valuation of Government Securities.

Setting up Valuation Committee at the AMCs level.

Identification, Provisioning and Disclosure of Non-Performing Assets.

Disclosure standards - Mandatory disclosure of full portfolio twice a year.

Page 14: 5 amfi  point

Quarterly and even monthly disclosure of portfolio by many funds.

Keeping investors informed – Audited reports to be sent to investors within a stipulated time – periodic communication to investors.

Release of redemption cheques within stipulated time and payment of penal interests for delayed payment.

Advertisement guidelines- general and those relating to Performance Advertisement.

Adoption of technology for quicker service - Online Transaction.

Suitable benchmarks being developed for different types of schemes.

Minimum level of risk management system being worked out.

IMPROVEMENT IN IMPROVEMENT IN OPERATIONAL AREAS OPERATIONAL AREAS contd….contd….

Page 15: 5 amfi  point

World over intermediaries selling mutual funds are licensed and regulated.

Beginning made towards regulation-AMFI’s initiatives Launched Certification programme since July 2000 in association with

NSE Certification made mandatory from November 2001 Launched registration of certified intermediaries as AMFI Registered

Mutual Fund Advisors (ARMFA)

Provided a broad set of guidelines known as AMFI Guidelines and Norms for Intermediaries (AGNI)

Registration of AMFI Certified Agents made mandatory from November 2002

Extensive training programmes being conducted countrywide

REGULATION OF INTERMEDIARIES

Page 16: 5 amfi  point

To promote and protect the interests of Mutual Funds and their unit holders.

To define and maintain high ethical and professional standards in the industry.

To enhance public awareness of Mutual Funds.

To represent industry views and suggestions to the Regulator, Government and the Central Bank

ROLE ANDROLE AND ACTIVITIES OF ACTIVITIES OF ASSOCIATION OF MUTUAL FUNDS IN ASSOCIATION OF MUTUAL FUNDS IN

INDIAINDIAAMFI is the industry association of all mutual funds operating in India. It is not a Self-Regulatory Organisation. It is a non-profit organisation whose objectives are:

Page 17: 5 amfi  point

PERFORMANCE PERFORMANCE

(EQUITY DIVERSIFIED FUNDS)(EQUITY DIVERSIFIED FUNDS)

7.45-5.8915.65S&P CNX 500 Equity Index

3.79-8.317.18S&P CNX Nifty

2.09-8.7611.11BSE Sensex

13.89-3.4517.81MF Average Returns

5 years

(43 Sch)

3 years

(65 Sch)

1 year

(74 Sch)

P2P Returns

Equity mutual funds have outperformed all major indices over 1 year, 3 years & 5 years

CRISILFUND SERVICES

* Data for year ending June 30, 2003

Page 18: 5 amfi  point

PERFORMANCE PERFORMANCE

(EQUITY DIVERSIFIED FUNDS BASED ON (EQUITY DIVERSIFIED FUNDS BASED ON AUM)AUM)

* Data for year ending June 30, 2003 CRISILFUND SERVICES

1.86%698.14%375 Years

15.96%1784.04%483 Years

16.28%2183.72%531 Year

CorpusNo. of SchCorpusNo. of SchPeriod

UnderperformanceOutperformance

•Over 5 year period 98.14% of AUM has outperformed BSE Sensex

•Over a longer investment horizon a majority of schemes have outperformed BSE Sensex

•As of 30th June 2003, out of 86 schemes 21 schemes are below par value, which amounts to 17.12% of AUM

•Over 5 year period 98.14% of AUM has outperformed BSE Sensex

Page 19: 5 amfi  point

PERFORMANCE PERFORMANCE

(IT SECTOR FUNDS)(IT SECTOR FUNDS)

IT mutual funds have managed to outperform the benchmark index with 2 of the schemes giving positive returns

CRISILFUND SERVICES

* Data for year ending June 30, 2003

-22.49BSE IT

-7.28MF Average Returns

1 Year

(10 Sch)

P2P Returns

Page 20: 5 amfi  point

PERFORMANCE PERFORMANCE

(DEBT FUNDS)(DEBT FUNDS)

12.5012.009.50Small Saving Scheme Rates

12.0010.008.00FD Rates

13.1613.5313.13MF Average Returns

5 years

(14Sch)

3 years

(22 Sch)

1 year

(32Sch)

P2P Returns

Debt mutual funds have consistently given better returns than the other fixed income investment avenues

CRISILFUND SERVICES

* Data for year ending June 30, 2003

Page 21: 5 amfi  point

PERFORMANCE PERFORMANCE

(DEBT FUNDS BASED ON AUM)(DEBT FUNDS BASED ON AUM)

* Data for year ending June 30, 2003

CRISILFUND SERVICES

0.02%199.98%135 Years

0.00%0100.00%

223 Years

0.65%299.35%301 Year

CorpusNo. of SchCorpusNo. of SchPeriod

UnderperformanceOutperformance

Almost 100% of AUM has given returns more than the prevalent FD rates.

Page 22: 5 amfi  point

PERFORMANCE PERFORMANCE

(LIQUID FUNDS)(LIQUID FUNDS)

4.504.004.00SB Rates

8.327.696.22MF Average Returns

5 years

(9 Sch)

3 years

(15 Sch)

1 year

(26 Sch)

P2P Returns

Liquid mutual funds have consistently given much higher returns than Savings Bank A/C rates

CRISILFUND SERVICES

* Data for year ending June 30, 2003

Page 23: 5 amfi  point

PERFORMANCE PERFORMANCE

(BALANCED FUNDS)(BALANCED FUNDS)

Balanced mutual funds have given much higher returns than the composite benchmarks constituting S&P CNX Nifty and the prevalent FD rates

CRISILFUND SERVICES

* Data for year ending June 30, 2003

7.67Composite returns (Equity 40: Debt 60)

7.51Composite Returns (Equity 60: Debt 40)

14.91MF Average Returns

1 Year (30 Sch)P2P Returns

Page 24: 5 amfi  point

PERFORMANCE PERFORMANCE

(GILT FUNDS)(GILT FUNDS)

Gilt mutual funds have given returns more than double the prevalent FD rates.

CRISILFUND SERVICES

* Data for year ending June 30, 2003

9.50Small saving schemes

8.001 year FD Rates

16.42MF Average Returns

1 Year (24 Sch)P2P Returns

Page 25: 5 amfi  point

THANK THANK YOUYOU

ASSOCIATION OF MUTUAL FUNDS IN INDIAASSOCIATION OF MUTUAL FUNDS IN INDIA