Mutual funds have so far invested Rs 27,000 cr in debt market in Jan

With interest rates falling, both corporate and retail money might flow into debt funds

Mutual fund managers have pumped in over Rs 27,000 crore in debt market so far this month, primarily on account of participation from corporate and retail investors.

This follows a fund infusion of over Rs 3.31 lakh crore in debt market in the entire 2016.

Further, experts believe that trend is expected to continue in the coming months too due to fall in interest rates.

"With interest rates continuing to fall, both corporate and retail money can continue to come into debt funds. The debt market can also see support due to the inflows coming in from the demonetisation move," said Srikanth Meenakshi, COO at FundsIndia.Com.

Quantum Mutual Fund chief executive Jimmy Patel said: "In 2017, we will see more focus on retail investors, who are already showing a lot of commitment and maturity."

According to the Securities and Exchange Board of India (Sebi), fund managers have invested net sum of Rs 27,473 crore in debt markets in this month (till January 23). The investment is expected to rise further as the month is yet not over.

This is the highest investment level since September, when fund managers had poured in Rs 53,347 crore.

Besides, fund managers have put in a little over Rs 4,000 crore in equities during the period under review.

The industry, comprising 41 active players, has an assets under management of Rs 16.93 lakh crore.

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.