Mutual Fund in India: An Analysis of Performance and Some Emerging Issues in Unit Trust of India

Abstract

Mutual Fund is a topic which is of huge interest not only to researchers all over the world, but also to investors. Unit Trust of India as India's first mutual fund was set up as an effective vehicle for channelizing progressively larger share of household savings to productive investments in the corporate sector. In 1964, Unit Trust of India (UTI) came up with the first mutual fund Unit Scheme, 1964, popularly known as US 64 which was the first open ended balanced fund. But, during late nineties, UTI faces severe challenges with its unit scheme US 64. At present, mutual funds have emerged as an important segment of financial market of India, especially as a result of the initiatives taken by the Government of India for resolving problems relating to UTI's US-64. This paper tries to analyze the crisis faced by Unit Trust of India, specially its largest savings mobilization scheme-US64 and evaluate overall performance of UTI in terms of savings mobilization ,profitability, dividend distribution, income and expenditure pattern, investible funds, redemption and net inflow of funds. At last, the paper recommends some measures in overcoming the challenges faced by UTI.

Key words: Mutual fund, Unit trust of India, US 64, Mobilisation, Fund.