Fund managers’ exposure to the software space has dropped to the lowest level in nine months to Rs 22,986 crore at the end of May, amid weakness in the sector.

According to latest data available with the Securities and Exchange Board of India (SEBI), mutual fund (MF) industry’s investment in software stocks stood at Rs 22,986 crore as on May 31, accounting for 10.25 per cent of their total equity assets under management (AUM) of Rs 2.25 lakh crore.

This was their lowest exposure in the software stocks since August 2013, when the total value of mutual fund investments in the sector stood at Rs 20,284 crore.

In comparison, the mutual fund exposure to software stocks was at Rs 24,438 crore in April this year.

Market participants attributed the decline in investment in software shares to profit-booking and their inclination towards banking 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.

During May, IT stocks under-performed broader market by falling 3.4 per cent, while the BSE’s benchmark Sensex surged nearly 8 per cent.

Investment growth in software stocks by the industry’s equity fund managers has dropped from Rs 27,772 crore in January to Rs 22,986 crore in May. It had touched a record high of Rs 28,784 crore in February.

However, mutual fund managers raised their exposure in bank stocks to an all-time high of over Rs 48,419 crore in May.

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