Mutual funds cut cash allocation by over Rs 4,500 crore in June to 19-month low

Mutual funds reduced their cash holdings by over Rs 4,563 crore to Rs 1.83 lakh crore in June from Rs 1.87 lakh crore in May. Cash holdings fell to a 19-month low as fund houses increased investments in domestic equities amid a strong market rally, supported by easing geopolitical tensions and lower crude oil prices.

The benchmark indices, BSE Sensex and Nifty50, gained 2.98% and 2.06%, respectively, in June 2026.

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Cash holdings accounted for 4% of total assets in June, while the industry's equity assets under management (AUM) stood at Rs 45.78 lakh crore.

The June cash balance was the lowest since November 2024, when mutual funds held Rs 1.80 lakh crore in cash, equivalent to 4.98% of total assets.

Of the 50 fund houses, 29 reduced their cash holdings during the month, while 21 increased them.

SBI Mutual Fund led the decline, cutting its cash balance by Rs 3,829 crore to Rs 22,083 crore in June from Rs 25,913 crore in May. PPFAS Mutual Fund and Motilal Oswal Mutual Fund followed, reducing cash holdings by Rs 1,997 crore and Rs 1,903 crore, respectively.

Another 11 fund houses trimmed cash holdings by Rs 100 crore to Rs 500 crore, including Bandhan Mutual Fund, HDFC Mutual Fund, Kotak Mutual Fund, Baroda BNP Paribas Mutual Fund, Invesco Mutual Fund and Old Bridge Mutual Fund.

Abakkus Mutual Fund reduced its cash holdings by Rs 51.75 crore to Rs 522 crore in June, followed by Helios Mutual Fund, which cut its cash balance by Rs 47.47 crore to Rs 128.98 crore.

JioBlackRock Mutual Fund reduced its cash holdings by Rs 8.7 crore, while Capitalmind Mutual Fund lowered its cash balance by Rs 3.44 crore to Rs 31.48 crore.

Fund houses that increased cash holdings

Among the 21 fund houses that increased cash holdings, Quant Mutual Fund topped the list, raising its cash balance by Rs 1,825 crore to Rs 14,007 crore in June. It was followed by Nippon India Mutual Fund and ICICI Prudential Mutual Fund, which increased their cash reserves by Rs 1,809 crore and Rs 1,501 crore, respectively.

The Wealth Company Mutual Fund increased its cash holdings to Rs 31.64 crore in June from Rs 15.93 crore in May, a rise of Rs 15.72 crore.

June 2026 cash tally

In June, six fund houses held cash balances of more than Rs 10,000 crore. PPFAS Mutual Fund had the largest cash reserve at Rs 24,107 crore, followed by HDFC Mutual Fund (Rs 23,987 crore) and SBI Mutual Fund (Rs 22,083 crore).

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The other three fund houses to have over Rs 10,000 crore cash were - ICICI Prudential Mutual Fund, Quant Mutual Fund and Axis Mutual Fund.

Cash holdings by SIFs

There are currently nine Specialised Investment Funds (SIFs), though data for only four was available on ACE MF. Among them, the ICICI Prudential Mutual Fund-managed SIF had the highest cash holdings at Rs 568 crore in June, followed by Diviniti SIF, managed by ITI Mutual Fund, with Rs 89.51 crore.

Altiva SIF, managed by Edelweiss Mutual Fund, and Arudha SIF, managed by Bandhan Mutual Fund, held cash balances of Rs 50.40 crore and Rs 20.20 crore, respectively.

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own and do not necessarily represent the views of The Economic Times)

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