In a move that highlights the increasing dominance of private sector mutual funds (MFs), Birla Sun Life has surged past SBI MF to become the second largest MF in country, and now trails only Unit Trust of India (UTI).

According to news reports, Birla MF had net assets of Rs 35.5 bn as on December 23, 1999. SBI MF had net assets of Rs 33.9 bn on the same day. UTI of course, continues to lead the show with assets in excess of Rs 630 bn, which amounts to approximately 75% of the Indian MF industry.

Birla MF seems to be realising its dream of becoming the second largest player in the Indian MF industry. This is the dream with which it started the business the more than four years ago. Undoubtedly, Birla Advantage (an open-ended growth fund) has been the scene-stealer for the MF with assets in excess of Rs 30 bn out of Birla MF's total asset base of Rs 35.5 bn.

This development also underlines the influence of private funds in the stock markets. Private funds have stolen a march over their public sector counterparts in just about everything. They have posted better returns, introduced more innovative schemes, shown more transparency, which has had a direct impact on their inflows. Among the private funds, Kothari Pioneer, Prudential-ICICI and Birla have performed exceedingly well.

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