Mutual funds boost cash allocation to Rs 2.06 lakh crore in July amid weak Q1 earnings

Mutual funds increased their overall cash allocation by Rs 2,884 crore in July to Rs 2.06 lakh crore, after cutting exposure for two straight months amid a weak Q1 earnings season.

Cash holdings rose to 5.20% of total AUM in July from 5.08% in June, with total equity AUM at Rs 39.80 lakh crore.

Of the 45 fund houses, five held over Rs 10,000 crore in cash. SBI Mutual Fund, the largest by AUM, had the highest cash allocation at Rs 34,592 crore, or 4.75% of its total assets.


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ICICI Prudential Mutual Fund and HDFC Mutual Fund held Rs 27,999 crore and Rs 27,031 crore in cash, respectively, in July.

PPFAS Mutual Fund had Rs 25,375 crore in cash – the highest in percentage terms at 21.36% of its total AUM. Axis Mutual Fund’s cash holdings stood at Rs 11,144 crore.

Quant Mutual Fund and Nippon India Mutual Fund had Rs 7,977 crore and Rs 7,264 crore, respectively. Edelweiss Mutual Fund rounded off the list of fund houses with over Rs 1,000 crore in cash, holding Rs 1,156 crore.

Nearly 23 fund houses had less than Rs 1,000 crore in cash, of which eight had under Rs 100 crore. Zerodha Mutual Fund and Angel One Mutual Fund reported the lowest cash holdings at Rs 0.70 crore and Rs 0.26 crore, respectively.

By percentage of AUM, PPFAS led with 21.36%, followed by new entrant Unifi Mutual Fund at 14.29%.

“We continue to look at individual investments on their own merits and will not hesitate to invest if an opportunity looks attractive. Our investment stance remains company-specific rather than macro-driven. We currently have about 23.29% in cash holdings, debt & money market instruments, and arbitrage positions that can be deployed in long-term investments at appropriate levels,” PPFAS said in its monthly release.

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Based on equity AUM, SBI Mutual Fund topped the list with Rs 6.93 lakh crore, followed by ICICI Prudential Mutual Fund at Rs 4.40 lakh crore.

At the other end of the spectrum, Angel One Mutual Fund and Unifi Mutual Fund had the lowest equity AUM at Rs 117 crore and Rs 115 crore, respectively.

Fund managers typically keep a portion of their portfolio in cash to meet redemption requests or deploy in the market when attractive opportunities arise.