Mutual fund, a term that you have probably heard million times in your life and it is also has been well-established as one of the best investment options. But what is mutual fund exactly? From where did it originate? How did it prosper so much? Well, it is very common to have these questions on your mind.
Before going to do anything, it is always necessary to be properly informed. And how do you know properly about something as huge as the mutual fund? Well, the answer is simple! You just need to learn about its history. Yes! Learning the history of something will give you more insight into it than you can even imagine. So, let’s review the history of the so-called mutual funds.
A walk through the history: Reviewing the beginning and evolution of the Mutual funds
Though the idea of the mutual funds actually originated in the late 18th century or the early 19th century in Great Britain and France; but it set its foot on the Indian soil back in 1963 with the foundation of Unit Trust of India. Well, the Unit Trust of India was a revolutionary initiative taken by the Indian government in collaboration with Reserve Bank of India. And it opened new frontiers for Indian investors with the creation of mutual funds.
Now, the mutual funds can be distinguished into four different time periods starting from 1963 till date. Hence, it is very necessary to review these four phases of the mutual funds through all these years to better understand them.
- First Phase (1963-1987)
Well, this was the longest phase in the history of mutual funds and it the time period when it all began! In the year 1963, the Unit Trust of India or UTI was established by the Reserve Bank of India following a parliament bill. However, in 1978 UTI got separated from RBI thus paving the way for Industrial Development Bank of India to take control of it briefly. UTI launched its first plan also known as Unit Scheme back in the year 1964 and the asset under this fund was calculated to be over 6700 crores at the end of the year 1988.
- Second Phase (1987-1993)
The year 1987 marked the inclusion of non-UTI mutual funds to the scene. The public sector banks collaborated along with the Life Insurance Corporation (LIC) as well as GIC to set up the mutual funds. SBI Mutual fund was the first to get established in the 1987, followed by the mutual funds from various other public sector banks.
- Third Phase (1993-2003)
This phase witnessed the rise of the private sector funds. Thus, it can be marked as the beginning of a completely new era in the rich history of the mutual funds. In 1993, the first mutual fund regulations came to existence and redefined the idea of mutual funds completely as it brought with it the private sector funds. However, the 1996 was the year when SEBI released reviewed mutual fund regulations which made it much easier for the private sector funds to come into existence.
- Fourth Phase (2003- till date)
The fourth phase is the present time period through which the mutual funds are going. Following the abolition of the UTI ACT of 1963 in the year 2003, new regulations for the mutual fund investments were registered under SEBI and it truly changed the world of mutual fund investment by making it more safe and profitable.
Mutual funds are probably the best choice of investment for the smart investors. And the rich history of the mutual funds shows how it has evolved over time and the direction in which it’s going. You can grasp more information on mutual funds at https://www.upwardly.in/ and make the best choice today for a better tomorrow.