MF investment in equity markets at Rs 70,000 cr in 2015

Strong retail participation seen as a factor; net inflow by equity MFs and equity-linked savings schemes jumps to Rs 87,000 cr

Mutual fund houses continued to be bullish on equity markets in 2015 and purchased shares worth a staggering over Rs 70,000 crore, primarily on account of strong participation from retail investors.

This is on top of Rs 23,843 crore already being infused in the entire 2014.

In comparison, foreign portfolio investors (FPIs) made a net investment of just Rs 16,674 crore during the period.

However, in the last three years, foreign funds have made an average investment of $20 billion (around Rs 1 lakh crore) each in the Indian stock markets.

According to the latest Sebi data, domestic mutual fund (MF) managers have invested a net Rs 70,173 crore in the equity markets in 2015.

The inflows could be much higher for this year as four trading sessions are still left.

"As domestic investors continued to invest in equities through MFs, 2015 turned out to be a stellar year for the industry with impressive inflow in the segment," UTI Mutual Fund EVP and Fund Manager V Srivatsa said.

Equity MFs, including equity-linked saving schemes, have seen a net inflow of nearly Rs 87,000 crore till November this year.

The surge in inflows into equity schemes has prompted fund houses to pump money in the share markets.

In addition, robust inflows from retail investors in the equity segment have also helped.

As per the industry body Amfi, 4-7 lakh retail folios are being added to the industry every month.

"Despite equities market not doing well throughout 2015, we have seen the inflows happening in the equity segment and through the retail segment", Quantum AMC managing director and chief information officer I V Subramaniam said.

He further said, "domestic mutual funds have been bullish on the stock market ever since the Narendra Modi-led BJP government came to power at the Centre."

Till April last year, holdings were facing liquidation due to redemption from investors and the money started pouring in from May 2014 and the momentum continued till this month.

They have made intensive buying especially in August and September 2015, when the domestic market crashed due to rout in Chinese equities. During that time, overseas investors pulled out from the Indian stock markets.

The sell-off by overseas investors in the Indian equity markets has given an opportunity to mutual fund managers.

Mutual funds are investment vehicles that pool funds collected from investors to invest in securities such as stocks, bonds, money market instruments and other assets.