Mutual funds have pumped in over Rs 33,000 crore in the debt market in January on hopes that fixed income securities will continue to benefit from improvement in economic prospects and the government’s reform initiatives.

Besides, mutual funds (MFs) invested Rs 270 crore in equity market last month.

Industry experts attributed the inflows in debt market to the government’s intent on introducing economic reforms and improved fundamentals of the domestic economy.

Besides, easing inflation and narrowing current account deficit were factors that drove the investments.

As per data released by the Securities and Exchange Board of India (SEBI), mutual funds invested Rs 33,572 crore in the debt market in January.

“There has been change in sentiment over the past few months, especially after the general election’s verdict in May. We are witnessing a trend where more and more investors are coming back into financial assets. Positive investment returns also attracted investors into both equity as well as debt funds,” an industry expert said.

“We continue to remain positive on the Indian debt market as it is well placed to benefit from the structural improvement in macroeconomic data and expect the positive undertone of the debt market to sustain, going forward,” said a report by ICICI Securities.

Mutual fund is an investment vehicle with a pool of funds collected from investors to buy securities such as stocks, bonds, money market instruments and similar assets.

This inflow has helped the mutual fund industry to cross Rs 11 lakh crore mark in assets under management (AUM) at the end of the year.

In 2014, mutual funds had invested Rs 6.2 lakh crore, higher than Rs 4.85 lakh crore pumped in the preceding year.

Related Topics
comment COMMENT NOW