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Mutual fund managers' exposure to the software sector has dropped to Rs 24,315 crore in March, after touching a record high in the preceding month, primarily on account of investors' concerns over the impact of appreciating rupee on exporters.
According to latest data available with market regulator Securities and Exchange Board of India (Sebi), investment by the mutual fund industry in software stocks stood at Rs 24,315 crore as on March 31, accounting for 11.92% of their total equity assets under management (AUM) of Rs 2.04 lakh crore.
In comparison, the fund managers' exposure to software stocks was at an all-time high of Rs 28,784 crore in February.
However, investment growth in software stocks by the industry's equity fund managers has risen from Rs 19,196 crore in March 2013 to Rs 24,315 crore in the corresponding month this year.
A mutual fund is a vehicle made up of a pool of funds collected from investors that buys and sells securities such as stocks, bonds and money market instruments.
Market participants attributed the decline in investment in IT shares by mutual fund managers to appreciating rupee and expensive valuations.
While some experts said that rising Indian currency is a cause for concern but they are comfortable with the currency being hovering around 60 levels.
During the month of March, IT stocks under-performed broader market by falling over 10%, while the BSE's benchmark Sensex rose by nearly 6%.
In March this year, mutual funds have investment of Rs 40,293 crore in the banking stocks, which was the highest among all sectors.
Besides, pharma stocks accounted for Rs 16,066 crore, while consumer non-durables attracted Rs 12,947 crore and petroleum products at Rs 10,909 crore.
