Mutual funds invested 7.37% of equity AUM only in IT sector in April

Domestic mutual funds are betting big on information technology stocks,as the equity scheme exposure to the defensive sector has jumped to a record high of about Rs 71,000 crore  in April, according to the data on the Securities and Exchange Board of India.

According to mutual fund managers, fund houses are augmenting stake in the IT sector amid depreciating rupee and market volatility.

"Rupee is falling against the dollar  which is good for IT companies and that is why we have been investing in software companies," said a fund manager from a private fund house.

Since the start of 2018, Indian rupee has depreciated by 5.82 percent  against the dollar and has been hovering around 68 a dollar.

From January this year, mutual fund managers have increased weightage to the sector, which earns a big part of their revenues in US dollars.So, each dollar earned abroad will get IT companies more rupees.

According to the SEBI data, fund houses allocated Rs 70,773 crore in April, accounting for 7.37 percent of their total equity assets under management of Rs 9.6 lakh crore.

In comparison, the exposure was at Rs 64,265 crore in March and Rs 42,023 crore in April 2017.