Monthly mutual fund data released by the Association of Mutual Funds in India (AMFI) shows a fall in net assets. Private funds continued their impressive run, while UTI’s market share slid further.

Total mutual fund assets in February 2001 diminished 2% (month-on-month) to Rs 1,024 bn (Rs 1,045 bn in January 2001).

As is evident from the chart, fall in mutual fund assets did not prevent private funds from growing, albeit marginally. Market share of private funds surged marginally to 29.9% (Rs 306.7 bn) in February 2001 - up from 29.3% (306.2 bn) in January 2001.

As opposed to private funds, UTI’s market share is going nowhere. Market share has fallen to 62.7% (Rs 642.5 bn) from 63.4% (Rs 662.8 bn) as on January 2001. Slowly but surely UTI is forfeiting its domination over the mutual fund industry.

Private funds with better service standards, better products and a whole lot of innovation have stolen the limelight away from UTI over the past couple of years. Many had felt that UTI would continue to dominate over the long term and that the private funds were only a flash in the pan. This perception has proved to be wrong and private funds are enhancing market share with UTI trying its best to survive solely on its brand name and the government’s ‘backing’.

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