NEW DELHI, Oct 26 (PTI): The mutual fund industry is betting big on software companies as its equity exposure to the sector climbed to a fresh all-time high of around Rs 320 billion at the end of September.
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 318.34 billion as on September 30, 2014, accounting for 10.83 per cent of their total equity assets under management (AUM) of Rs 2.94 trillion, 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 119.13 billion (6.71 per cent) in software shares.
The previous high was in August this year when investment in the sector rose to Rs 296.68 billion.
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 277.72 billion in January to Rs 318.34 billion in September.
Besides, mutual fund managers raised their exposure in bank stocks to an all-time high of over Rs 553.98 billion in September this year, which is the highest among all the sectors.
Among others, MFs have an exposure of Rs 219.08 billion in pharma space, followed by auto (Rs 188.92 billion) and finance (Rs 163.58 billion).
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