Which Mutual Funds are the Oldest in India

  •  4 min
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  • 23 Jun 2023

Mutual funds have become integral to the Indian investment landscape, allowing individuals to participate in the capital markets and generate wealth. Over the years, several mutual funds have emerged, catering to the diverse investment needs of individuals and institutions alike. In this blog, we delve into the oldest mutual funds in India, highlighting their rich legacies and their contributions to the financial ecosystem.

The inception of the Indian mutual fund industry can be traced back to 1963 with the Unit Trust of India (UTI), marking the country's first foray into mutual funds. The Reserve Bank of India (RBI) played a pivotal role in founding UTI, envisioning it as a means to channel the savings of small investors into the capital market and foster wealth creation. In a way, UTI was India's first mutual fund.

For over two decades, UTI stood as the sole mutual fund in India, dominating the market. However, recognizing the need for diversification and increased competition, the government took a significant step in 1993 by allowing the entry of private sector mutual funds. This policy change opened the doors for establishing various private-sector mutual funds, leading to a more vibrant and competitive mutual fund landscape in the country.

Launched in 1986, the UTI Mastershare Fund is one of India’s oldest mutual funds. It is a large-cap mutual fund with the primary objective of generating long-term capital appreciation. The fund achieves this by predominantly investing in equity and equity-related securities of large-cap companies.

Since its inception, the UTI Mastershare Fund has consistently delivered impressive returns, cementing its position as one of the top mutual funds in India. The fund's performance can be attributed to its well-executed investment strategy and the expertise of its seasoned fund managers. Over the years, the UTI Mastershare Fund has navigated various market cycles, demonstrating resilience and generating wealth for its investors.

Next on the list of oldest mutual funds in India is SBI Magnum Equity ESG Fund. It holds an important place in the history of mutual funds in India as the second oldest mutual fund, initially launched as SBI Magnum Equity Fund in 1991. Renamed to SBI Magnum Equity ESG Fund, it stands as a testament to the evolution of investment strategies, emphasizing the importance of Environmental, Social, and Governance (ESG) criteria. This thematic fund, driven by a mission to generate long-term capital growth, actively manages investments in a diversified company portfolio that aligns with ESG principles.

The primary objective of SBI Magnum Equity ESG Fund is to give investors opportunities for long-term capital appreciation by investing in firms that adhere to robust ESG criteria. By incorporating ESG factors into their investment decisions, the fund aims to support sustainable practices and have a positive impact on society and the environment.

The UTI Flexicap Fund holds a prominent position as one of the oldest mutual funds in India. With its rich legacy and adaptability to changing market dynamics, the fund has been instrumental in generating long-term capital appreciation for investors since its launch in 1992.

The primary objective of the UTI Flexicap Fund is to generate long-term capital wealth for its investors. The fund achieves this by predominantly investing in equity and equity-related securities of firms across the market capitalization spectrum. This flexible approach allows the fund manager to navigate the dynamic market environment and take advantage of opportunities across large-cap, mid-cap, and small-cap segments.

As per SEBI guidelines, the fund underwent a name change from Multicap to Flexicap a few years back. This shift reflects the fund's enhanced investment flexibility, enabling it to adapt to market conditions and optimize returns by actively managing the allocation across different market capitalization categories.

SBI Large and Midcap fund is one of India’s oldest mutual funds, launched in 1993. This scheme, aimed at delivering growth opportunities to investors, builds a diversified portfolio primarily comprising large-cap and mid-cap companies. By combining the stability of established large-cap companies with the growth prospects of emerging mid-cap companies, the fund aims to strike a balance between risk and return.

The diversified portfolio provides investors exposure to a broad range of sectors, enabling them to benefit from different economic cycles and market conditions. The fund management team employs meticulous research and analysis to identify companies with strong growth prospects.

Focusing on quality and sustainability, the team conducts in-depth evaluations of financial performance, management capabilities, and competitive advantages of potential investment opportunities. This rigorous selection process aims to ensure that only the most promising companies find a place in the fund's portfolio.

In Conclusion

The oldest mutual funds in India have left an indelible mark on the country's financial landscape. From pioneering the concept of mutual funds to creating wealth for millions of investors, these funds have played a vital role in shaping the Indian investment ecosystem.

Their long-standing presence, adherence to regulatory norms, and commitment to investor welfare have earned them the trust of millions of investors. As the industry continues to evolve, these legacy funds serve as a reminder of the transformative power of prudent investing and the potential for wealth creation over the long term.

FAQs

Unit Trust of India, or UTI, is India's first mutual fund.

Yes, the oldest mutual funds in India, such as UTI Mastershare and SBI Magnum Equity Fund, are still active and available for investment. These funds have continued to operate and accept investments from investors.

To invest in these oldest mutual funds, you can directly approach the respective asset management companies (AMCs) and follow their investment procedures. Most AMCs offer multiple channels for investment, including online platforms, physical application forms, and tie-ups with distributors and financial institutions.

Yes, like any investment, investing in mutual funds, including the oldest ones, carries certain risks. These risks include market volatility, economic factors, industry-specific risks, and the fund manager's investment decisions. Understanding the risks associated with any investment is crucial, and consulting with a financial advisor if needed.

No, these oldest mutual funds cannot guarantee returns. Mutual funds have market risks, and their performance depends on various factors, including the performance of the underlying securities in the portfolio. Investors should be aware that the value of their investments in mutual funds can fluctuate, and there is no assurance of positive returns.

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