Mutual funds pump over Rs 33,000 crore in Indian debt markets

New Delhi, Feb 1: Mutual funds have pumped over Rs 33,000 crore in debt markets 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 a net amount of Rs 270 crore in equity markets last month. Industry experts attributed the inflows during the month in debt to the new 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 investments. As per data released by the capital markets regulator the Securities and Exchange Board of India (Sebi), mutual funds invested a net sum of Rs 33,572 crore in the debt markets 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 markets 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 invested a net amount of Rs 6.2 trillion, higher than Rs 4.85 trillion pumped in the preceding year.

PTI