Mutual funds cut cash allocation by Rs 8,500 crore in August to Rs 1.82 lakh crore; ICICI Pru MF leads reduction

Mutual funds reduced their cash allocation by nearly Rs 8,502 crore month-on-month to Rs 1.82 lakh crore in August, from Rs 1.90 lakh crore in July, according to monthly data from ACE MF.

Cash holdings as a percentage of total assets declined to 3.80% in August from 4.06% in July, while equity AUM stood at Rs 47.99 lakh crore during the month.

Of the 50 asset management companies (AMCs), 27 reduced their cash allocation in August compared with July, while 23 increased their cash holdings.


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Among these 27 AMCs, seven AMCs reduced their cash allocation by over Rs 1,000 crore. ICICI Prudential Mutual Fund reduced its cash allocation by Rs 4,314 crore on a monthly basis to Rs 16,845 crore in August compared to Rs 21,159 crore in July. The cash allocation as a percentage of equity AUM in August was 2.91% compared to 3.69% in July.

This was followed by SBI Mutual Fund and HDFC Mutual Fund who reduced their cash allocation by Rs 2,551 crore and Rs 1,760 crore respectively. Axis Mutual Fund reduced its cash allocation by Rs 1,529 crore and had Rs 10,559 crore cash in its portfolio.

PPFAS Mutual Fund reduced its cash holding by Rs 1,415 crore on monthly basis and had Rs 23,876 crore cash in its portfolio in August compared to Rs 25,291 crore in July. The fund house in its monthly factsheet said, “We continue to look at individual investments on their own merits and will not hesitate to invest if an opportunity looks attractive.”

“As usual, our investment stance does not depend much on the macro-economic situation but is focussed on individual companies. We have about 11.58% in cash holdings, debt & money market instruments and arbitrage positions which can be deployed in long term investments at appropriate levels,” PPFAS MF further said.

Mirae Asset Mutual Fund and Nippon India Mutual Fund reduced their cash holding by Rs 1,110 crore and Rs 1,089 crore respectively.

Sandeep Tandon led Quant Mutual Fund reduced its cash holding by Rs 417 crore and had Rs 14,322 crore cash in its August portfolio. JioBlackRock Mutual Fund reduced the cash allocation by Rs 10.19 crore and had nearly Rs 30.10 crore cash in its portfolio in the said time period.

Increase in cash allocation

Among the 23 AMCs who increased their cash allocation on a monthly basis, Bandhan Mutual Fund increased by Rs 2,649 crore to Rs 8,579 crore in August. This was followed by Kotak Mutual Fund who had Rs 7,424 crore cash in its portfolio and increased the allocation by Rs 2,181 crore on monthly basis.

Abakkus Mutual Fund increased the cash allocation by Rs 165 crore and this was followed by Helio Mutual Fund who increased the cash allocation by Rs 162 crore. Old Bridge Mutual Fund increased its allocation by Rs 18.56 crore on a monthly basis.

Cash holding snapshot in August

Six AMCs had over Rs 10,000 crore cash in their respective portfolios in August. PPFAS Mutual Fund had the highest cash allocation in its portfolio of Rs 23,876 crore which was 15.52% of the total equity AUM. SBI Mutual Fund and HDFC Mutual Fund had Rs 21,864 crore and Rs 21,412 crore cash respectively.

ICICI Prudential Mutual Fund and Quant Mutual Fund had Rs 16,845 crore and Rs 14,322 crore cash respectively. Axis Mutual Fund had Rs 10,559 crore cash in its portfolio.

Radhika Gupta led Edelweiss Mutual Fund had Rs 1,790 crore cash in its portfolio. AlphaGrep Mutual Fund, which is a new entrant in the mutual fund industry, had Rs 11.97 crore cash in its portfolio which was 23.62% of the total equity AUM.

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SIFs cash holding trend

The data for six SIFs was available in ACE MF and out of which iSIF by ICICI Prudential Mutual Fund had the highest cash allocation of Rs 665 crore, followed by APEX SIF by Aditya Birla Sun Life Mutual Fund who had Rs 304 crore cash in its portfolio.

Altiva SIF by Edelweiss Mutual Fund had Rs 26 crore cash. Arudha SIF, Diviniti SIF and Summit SIF had Rs 27 crore, Rs 52 crore and Rs 33 crore cash, respectively.

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

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