Cash Holding Trends in Equity MFs - June 2025
Financial Report
Mutual Funds Stay Selective Despite Market Optimism: India’s equity mutual funds embraced a more confident tone in June 2025, stepping up their market purchases amid a surge in investor appetite. Backed by robust equity inflows and record-breaking SIP contributions, the industry’s cash holdings stood at ₹2.04 Lakh Cr—only marginally lower than May’s ₹2.17 Lakh Cr. This modest dip signals that while fund managers are gradually deploying capital, they continue to tread with caution, maintaining healthy liquidity buffers for strategic opportunities ahead.
Cash Holding Ratio Slips Below 5% as Equity Allocation Rises: The average cash holding ratio among the top 20 AMCs declined to 4.88% in June 2025, slipping well below the 5% mark and down from 5.75% in May. This steady drop reflects a measured increase in equity allocations, signaling growing conviction among fund managers while still maintaining prudent liquidity levels.
Cash-Heavy Mutual Funds: PPFAS Tops with 19.65%, SBI Holds ₹34,655 Cr
PPFAS MF leads the pack with the highest cash holding ratio at 19.65%, reflecting its conservative and flexible investment approach..
Motilal Oswal MF and Quant MF follow with 8.64% and 7.25% of AUM in cash, respectively, highlighting strong liquidity positioning.
SBI MF holds the largest pile at ₹34,655 Cr, followed by ICICI Pru MF ₹28,196 Cr and HDFC MF MF ₹27,013 Cr, showing significant dry powder among large AMCs.
Parag Parikh Flexi Cap Fund holds the highest cash ratio among equity schemes at 19.89%, reflecting a strong liquidity stance amid prevailing market uncertainties. Close behind, SBI Contra Fund and SBI Small Cap Fund maintain elevated cash levels of 19.29% and 17.44%, respectively, positioning themselves among the most liquidity-heavy active equity strategies. Motilal Oswal Midcap Fund also stands out with a notable 16.63% in cash, while HDFC Focused Fund holds 16.07%, both indicating a cautious and flexible approach in response to potential market volatility.
Contra Funds top the chart with 14.44% of AUM in cash, indicating a highly cautious or opportunistic approach amid market uncertainty, Flexi Cap Funds follow with a substantial 9.24%, indicating a deliberate strategy focused on liquidity and tactical allocation flexibility. Focused Funds, with 7.91% in cash, appear to support their concentrated stock-picking approach with a healthy liquidity buffer. Small Cap Funds and Dividend Yield also show prudence, holding 7.27% and 6.03% respectively, likely to weather short-term volatility or await better entry points.
MF Equity Buys Surge as Inflows Rebound: Mutual Funds bought ₹45,519 Cr worth of equities in June 2025, showing strong buying interest. Equity inflows rebounded from low, rising 24% MoM to ₹23,587 Cr, reflecting renewed investor confidence.
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