Mutual funds pumped in more than Rs 23,500 crore in domestic equities in 2014 mainly on account of a 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.
SEBI data
According to the data released by the Securities and Exchange Board of India, mutual fund (MF) houses infused about Rs 23,530 crore in domestic equities in 2014.
Industry experts attributed the inflows in equities to improvement in market sentiment and increased participation from retail investors, primarily due to change of government at the Centre.
Fund infusion began from the second half of May, after the announcement of election verdict, and the momentum has continued till date.
Net sellers
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 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.
Net inflow into the equity market is in line with the benchmark BSE index Sensex gaining more than 29 per cent in 2014.