Active mutual funds' cash holdings drop to 2025 low at 5.3% of AUM

Active mutual funds recorded their highest equity purchases in five months of Rs 44,900 crore, while total equity inflows stood at around Rs 30,000 crore. As a result, the overall cash holdings of active mutual funds have declined to their lowest level so far in calendar year 2025 at just 5.3% of assets under management, according to a report by ICICI Securities.

Also Read | Confused between gold and silver? Why not leave it for fund manager to decide


The MF cash level includes cash, treasury bills, CDs, and commercial papers held by active equity-oriented schemes, the report said.

The active buying by mutual funds of Rs 44,900 crore was broad-based, led by mid-caps. The large/mid/small caps attracted net buying of Rs 11,800 crore/Rs 19,400 crore/Rs 9,500 crore respectively.

In the large cap segment, major inflows were observed into consumer discretionary, utilities, and financial services sectors, whereas private banks, auto, and industrials sectors saw major outflows.

On the midcap side, major inflows were noted in consumer discretionary, industrials and healthcare sectors, while exchanges, insurance and cement sectors saw major outflows. In the small cap segment, major inflows were recorded in financial services, insurance/healthcare, industrials and autos sectors, whereas IT and energy sectors saw major outflows.

In June, the mutual fund buying surge was driven by inflows in equity-oriented schemes and arbitrage funds.

The systematic investment plan (sip) flows have continued their upward trajectory with total SIP flows in the current calendar year so far recorded at Rs 1.58 lakh crore with June 2025 contributing the maximum of Rs 27,300 crore.

Also Read | Stocks, FD or Mutual Funds? Radhika Gupta shares 3 basics to smart investing

According to the report, foreign portfolio investors (FPIs) were net buyers to the tune of Rs 20,400 crore in June, focusing on financials, energy, autos, and telecom whereas major FPI selling was witnessed in sectors like FMCG, power, and industrials. However, the momentum seems to have reversed in July, with net outflows of Rs 2,300 crore so far. FPI holdings in Indian equities remain at a decadal low, underscoring the structural shift toward domestic institutions.

The report mentioned that July 2025 has seen a dip in mutual fund buying frenzy so far of Rs 10,200 crore till July 14, on the flip side, inflows into SIP continue to be robust and reached an all-time high of INR 273bn in June 2025, indicating cash levels may rise moderately during July.