Hi guys, I am debt fund. For many of you, I am the less glamorous cousin of equity. While, equity is always in the news for good or bad reasons, my slow and steady moves governed by factors like interest rates and currency seems more complicated in comparison.
I know you are somewhat familiar with me but today let me tell you my history.
UTI MF first introduced me to Indian investors with a scheme titled UTI MIP Fund. I was essentially, a five year closed ended assured return product. UTI offered investors guaranteed returns paid via post-dated cheques. Inspired by this concept, UTI and a few public sector fund houses launched me in close-ended avatar many times.
The next turning point of my life was introduction of open-ended debt funds. In April 1995, JM Mutual Fund launched the first medium duration fund (currently, medium to long duration fund). The next few years saw launch of many other categories of open-ended debt funds. To name a few Aditya Birla Sun Life Corporate Bond Fund (previously Aditya Birla Sun Life Short Term) launched in March 1997 and UTI Money Market Fund launched in April 1997. However, money market funds had a 30-day lock in period. Aditya Birla Sun Life Mutual Fund did away with loads in their Birla Cash Plus Fund (currently Aditya Birla Sun Life Liquid Fund) in June 1997.
The following year i.e. 1998 was a memorable one for me. In June, ICICI Prudential Mutual Fund launched Prudential ICICI Liquid Fund whose NFO was one of the biggest then in terms of assets collected.
The year also saw Kotak Mutual Fund launching two new categories of funds in December, Kotak Banking and PSU Debt Fund and Kotak Gilt Investment. Continuing its innovative streak, Kotak launched the first FMP in October 1999.
Another monumental point in my journey was the launch of Pioneer Money Management Account in 1999. It was the first debt fund to have a fixed NAV of Rs. 1. Any gains were credited to the investor’s account as new units. You can say that the fund was a precursor to daily dividend reinvestment plan of liquid funds. Moreover, the fund was the first to offer a chequebook facility to its investors. However, it had to discontinue the facility due to a RBI mandate.
From my modest beginnings as a close-ended fund, I now have many avatars such as credit funds, corporate bond funds and so on.
Over the years, I have gained wider acceptance in your portfolios. A look at my asset growth, from Rs. 49,410 crore in December 1999 to Rs. 11.11 lakh crore on December 2017 is a testimony to that acceptance.