Mutual fund cash holdings slip below 5% to 9-month low in August; PPFAS, Kotak MF raise stakes

Mutual fund cash holdings as a percentage of total assets fell below 5% in August, hitting a nine-month low of 4.99% compared to 5.17% in December 2024. During this period, mutual funds collectively held Rs 1.98 lakh crore in cash.

The data also showed that some prominent fund houses, including PPFAS Mutual Fund and Kotak Mutual Fund, increased their cash positions in August.

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PPFAS Mutual Fund’s cash holdings as a percentage of total assets stood at 22.33% in August, up from 21.36% in July. Kotak Mutual Fund increased its cash position to 3.29% from 2.17% over the same period.

“We have about 24.08% in cash holdings, debt & money market instruments and arbitrage positions, which can be deployed in long-term investments at appropriate levels,” PPFAS said in its monthly release.

Quant Mutual Fund also raised its cash holdings to 10.72% in August from 9.12% in July.

In absolute terms, five fund houses held more than Rs 10,000 crore in cash. SBI Mutual Fund led with Rs 31,416 crore (4.36% of total assets), followed by PPFAS (Rs 26,925 crore), HDFC Mutual Fund (Rs 26,494 crore), ICICI Prudential Mutual Fund (Rs 25,808 crore), and Axis Mutual Fund (Rs 11,206 crore).

Quant Mutual Fund held Rs 9,034 crore in August, while around 25 fund houses maintained less than Rs 1,000 crore each. The list included new entrants Capitalmind Mutual Fund and JioBlackRock Mutual Fund.

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Mirae Asset Mutual Fund and Baroda BNP Paribas Mutual Fund held Rs 1,323 crore and Rs 1,017 crore in cash, respectively, in August. Edelweiss Mutual Fund maintained Rs 964 crore in cash during the same period.

Among the new fund houses, Capitalmind Mutual Fund held Rs 38.28 crore in cash, while JioBlackRock Mutual Fund had Rs 0.89 crore. Angel One Mutual Fund reported the lowest cash portion at Rs 0.25 crore.

On the equity AUM front, SBI Mutual Fund led with Rs 6.89 lakh crore in August, followed by ICICI Prudential Mutual Fund with Rs 4.43 lakh crore. At the other end of the spectrum, Capitalmind Mutual Fund, owned by Deepak Shenoy, had the lowest equity AUM at Rs 73.05 crore.

Fund managers typically maintain a portion of their portfolios in cash to meet redemption requirements or to deploy when market opportunities arise.