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 2021.
Owing to the consistent buying, cash levels at certain fund houses declined last month.