Cash Holding Trends in Equity MFs - April 2025
Financial Report
Equity Mutual Funds Play Safe with ₹2.3 Lakh Cr Cash Buffer: India’s equity mutual funds continue to adopt a cautious stance, with cash reserves hovering above ₹2.3 Lakh Cr as of April 2025 — sustaining one of the highest liquidity cushions in recent years. Despite intermittent market rallies, AMCs are holding back on aggressive equity allocations, signalling a preference for dry powder amid global and domestic headwinds.
Average Cash Holding Edges Higher Again: The average of cash holding ratio among the top 20 AMCs ticked up further to 6.53% in April, compared to 6.03% in March, extending the cautious momentum.
Cash-Heavy MFs: PPFAS Flexes with 23.57%, SBI Stacks ₹38,000 Cr
PPFAS MF leads with the highest cash holding ratio of 23.57%, driven by its cautious flexi-cap strategy.
Motilal Oswal MF and Quant MF follow with 14.50% and 13.05%, also maintain sizable liquidity buffers.
Large players like SBI MF, HDFC MF and ICICI Pru MF lead in absolute cash holdings — SBI MF alone holds over ₹38,000 Cr in cash.
Cash Cushion Rises: MFs Dial Back Equity Bets Amid April’s Market Jitters: Equity mutual funds invested ₹20,246 Cr in equities during the first half of April, but booked profits worth ₹2,182 Cr in the second half, bringing net equity investments down to ₹18,063 Cr. Combined inflows into equity mutual fund schemes crossed ₹50,000 Cr in March and April, but actual deployment remained far lower, reflecting a conservative approach by fund managers amid volatile market conditions. Fund managers are maintaining elevated cash levels as a buffer against stretched valuations and rising global uncertainties, especially after the U.S. imposed and subsequently paused new trade tariffs.
Motilal Oswal Flexi Cap Fund leads with the highest cash holding ratio at 33.34%, followed closely by Motilal Oswal Midcap Fund and Parag Parikh Flexi Cap Fund have cash holding ratios at 24.54% and 23.79% respectively, among the highest in active equity schemes. SBI Contra Fund and SBI Small Cap Fund maintain over 20% in cash.
Contra Funds lead with the highest cash holding at 17% of AUM, signaling a highly cautious stance, followed by Flexi Cap (10.89%) and Focused Funds (9.39%), reflecting flexible allocation strategies. Small Cap Funds also maintain a notable 8.80% cash buffer to guard against volatility-driven corrections.
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