Mutual funds pumped Rs 4.74 lakh crore into the debt market in 2012-13, making it their biggest investment in the last 12 years.
The financial year ended March 31, 2013 also marked the 12th consecutive year of net inflows by mutual funds (MFs) into the debt market.
As per the latest data compiled by market regulator Sebi, the net investment by MFs in the debt market during 2012-13 stood at Rs 4,73,460 crore -- which is the highest net inflow for a single fiscal since 2000-01, when funds had made investment worth Rs 50,235 crore.
The data for funds' investment into the debt market are not available before 2000-01. During 2011-12, MFs had invested Rs 3.35 lakh crore in debt-oriented schemes.
According to market participants, funds houses have poured most of the money in debt-oriented schemes because of the better returns offered by such schemes as compared to fixed deposits in banks.
Another reason for investing in debt schemes was that lower-risk associated with it than equity funds.
On the contrary, mutual funds took a bearish stance on the stock market during 2012-13 with an outflow of nearly Rs 23,0000 crore. Besides, this was the fourth consecutive year of net outflow by MFs from the equities.
The huge sell-off from the equities during the year coincided with a rise of about 8 per cent in the market benchmark Sensex.
Since 2000-01, mutual funds have made a cumulative net investment of over Rs 20 lakh crore in the debt market, while they pulled out a net amount of Rs 81,663 crore from the equities during this period.
At the end of March, there were a total of 1,294 schemes under mutual funds, of which 857 schemes (66 per cent of the overall schemes) were income/debt oriented while 347 schemes (27 per cent of total schemes) were growth/equity related.
Besides, assets under management in the debt segment stood at Rs 4.9 lakh crore at the end of March 31, 2013, while it was Rs 1.79 lakh crore for the debt.