They used to be an avenue of mutual gains for investors in both good and bad times for years, but incurred heavy losses in 2008, when mutual funds became poorer by about Rs 1,50,000 core (Rs 1,500 billion) or about one-third of their total size.

Such has been the impact of these losses - which accounted for nearly three-fourths of the overall gains in the previous year 2007 - that investor confidence got shattered in just a few months of downturn.

In contrast, it had taken five years to gauge the success of the world's first mutual fund, launched by Massachusetts Investment Trust, in 1925, and to gain the confidence to grow beyond a single fund.

Moreover, this confidence came only after the first fund survived the stock market crash of 1929 and came out with positive returns for the investors.

The mutual fund industry in India, with nearly 36 members, was regarded as a safe avenue of mutual gains for investors till 2007 -- when their total wealth grew by more than Rs 2,30,000 crore (Rs 2,300 billion) to Rs 5,50,000 crore (Rs 5,500 billion).

However, the stock market downturn, beginning early 2008, wiped off close to Rs 1,50,000 crore this year, bringing its asset size to nearly Rs 4,00,000 crore (Rs 4,000 billion) and leaving the industry shattered with a huge liquidity crunch.

But the industry, where players operate with catch lines like "Let's plan to get rich" and "Reaching new heights", hopes its fortunes will revive in 2009 and it will regain retail and corporate investors' confidence.

"We believe 2009 will be a better year and the mutual fund industry would bounce back with general improvement in liquidity and economy as government measures would promote growth, while the overall market sentiment is likely to change from January onwards," Association of Mutual Funds chairman A P Kurien said.