MFs raise equity bets as valuations improve; fund houses invest Rs 55k cr

Cash levels decline, equity allocation rises in balanced advantage funds in March

Mutual fund (MF) houses have been on an equity buying spree in the past three months as they have invested a net amount of Rs 55,000 crore in them between January and March 2023. The number is more than double the amount deployed in the preceding three months (October to December), signalling improved valuations and favourable economic indicators

The valuations, which had peaked in October 2021, returned to its long-term average in March 2023. The 12-month trailing price to earnings ratio (PE ratio) of Nifty50 declined to 21 last month from a high of 32 at the end of September