MF exposure to software stocks hits all-time high in July

Investments touch Rs 38,000 cr, fund managers raise allocation due to falling rupee vs dollar

Mutual Fund managers seem to be bullish on software shares as they raised their allocation in the sector to an all time-high of over Rs 38,000 crore in July due to depreciation in rupee.

In comparison, equity fund managers deployment in software stocks stood at Rs 27,596 crore in July last year.

Industry experts said that fund managers raised their allocation to software stocks due to declining rupee against the US dollar.

Like exporters, IT companies earn majority of their revenue in dollars. Depreciating rupee means exporters get more rupee per US dollar.

As per the data available with Securities and Exchange Board of India (Sebi), overall deployment of equity funds in bank stocks stood at Rs 38,404 crore in July compared with Rs 35,409 crore in the previous month.

Besides, exposure to software stocks was at 9.4 per cent against 9.26 per cent in the preceding month.

Indian rupee fell by 34 paise during the period under review. The domestic unit is trading at 65.40 against dollar.

The BSE IT index rose 6 per cent per cent in July, while BSE Sensex witnessed a growth of 1.2 per cent.

Besides, IT was the second-most preferred sector with fund mangers after banks, which has an exposure of Rs 85,329 crore.

Among others, MFs have an exposure of Rs 31,246 crore, followed by auto (Rs 28,761 crore) and finance (Rs 24,953 crore).

MFs are investment vehicles made up of a pool of funds collected from a large number of investors and invest in stocks, bonds and money market instruments, among others.