As the name suggests, an MF collects money from various people (known as investors) and invests on their behalf, in publicly traded securities such as shares and bonds. To achieve this goal, MFs have various schemes. These schemes could be open ended, close ended or exchange traded funds (ETF). Each MF is managed by a team of finance and investment experts headed by a Fund Manager. Fund Manager keeps trading, shuffling, buying, selling, replacing the securities under its jurisdiction: all to achieve the maximisation returns on the invested money. The MF industry is governed by SEBI.

Whatever the money a MF collects from its subscribers (or investors or customers as you may choose to call) is known as assets under management (AMU). One can directly avail the services of a MF Manager or can invest through Systematic Investment Plan (SIP. MF charges a fee from all its investors.

Of late, the MF industry is in the news for right reasons. As at the end of August, 2018, AMU of the Indian MF industry has crossed Rs. 25 lac crore (over USD 300 billion). Rs. 1.75 lac crore has been added in August’18 itself. Over 6 lac new SIP customers were added in this month. Now the total number of SIP customers in India stands at 2.39 cr.

Acceptance of MF as a mode of investment is sharply increasing. The youth are especially attracted to this.

AUM of the MF industry had crossed Rs. 10 lac cr first time in May 2014. It became Rs. 20 lac cr in August 17. It became Rs, 25 lac cr in August 18.

If the oil prices drop and Rupee strengthens, the same would help a rush of foreign investment in our markets and the AUM will increase further.