Millennium Post

MF investments in IT stocks hit all-time high in Sept

This also marks the fourth consecutive rise in mutual fund (MF) industry's exposure to software stocks.

Mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

The funds' investment in software stocks stood at Rs 31,834 crore as on 30 September, 2014, accounting for 10.83 per cent of their total equity assets under management (AUM) of Rs 2.94 lakh crore, according to data available with the Securities and Exchange Board of India (SEBI).

At current levels, the MF industry has the highest exposure to software sector since August 2009.

Data is not available for sector-wise exposure before August 2009, when the equity funds had deployed Rs 11,913 crore (6.71 per cent) in software shares. The previous high was in August this year when investment in the sector rose to Rs 29,668 crore.

According to market participants, MFs have been showing interest in software stocks since the beginning of the year amid rising equity market. They believe that the ongoing market rally might see mutual fund assets getting diversified. This year has seen a consistent growth in investment in software stocks by equity fund managers and fund infusion has grown from Rs 27,772 crore in January to Rs 31,834 crore in September.

Besides, mutual fund managers raised their exposure in bank stocks to an all-time high of over Rs 55,398 crore in September this year, which is the highest among all the sectors.

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