Mutual Funds pump Rs 23,500 crore into stocks in 2014 as market rallies

By: | Published: December 31, 2014 2:10 PM

Mutual funds pumped in more than Rs 23,500 crore in domestic equities in 2014 mainly on account of rally in stock markets.

Mutual Funds, stock market, Sebi, Securities and Exchange Board of IndiaThe money in equities started coming in from the second half of May, after the announcement of General Election’s verdict, and the momentum has continued till date. (Thinkstock)

Mutual funds pumped in more than Rs 23,500 crore in domestic equities in 2014 mainly on account of rally in stock markets.

This was in sharp contrast to net withdrawals of over Rs 21,000 crore in 2013.

Fund houses are upbeat about inflows for the next year as equity markets are expected to deliver further.

“The next year (2015) will be a very good year for the mutual fund industry,” JP Morgan AMC Managing Director and CEO Nandkumar Surti said.

According to the data released by capital market regulator Sebi, mutual fund (MF) houses infused a net amount of about Rs 23,530 crore in the domestic equities in 2014.

Industry experts attributed the inflows in equities to improvement in market sentiments and increased participation from retail investors, primarily due to change in the government at the Centre.

The money in equities started coming in from the second half of May, after the announcement of General Election’s verdict, and the momentum has continued till date.

Prior to May, mutual funds had been net sellers in the stock market since September last year. MFs were net buyers of shares worth Rs 1,607 crore in August 2013.

“Optimism of investors is one of the main reasons why the industry has seen inflow this year. The new government coming into power with majority on their own gave sense of stability and hope that this will will bring economy back on track,” Quantum AMC CEO Jimmy Patel said.

Mutual funds collect money from investors and later invest the same into various market segments including stocks, IPOs (primary market) and bonds.

The net inflow in the equity market is in line with the benchmark BSE index Sensex gaining more than 29 per cent in 2014.

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