Quant vs PPFAS Mutual Fund: Two fund houses are taking opposite cash calls amid market correction

With Nifty50 down by 9% from its September month end peak, Quant Mutual Fund is buying the dip while PPFAS Mutual Fund was seen raising cash in its portfolios.

Quant Mutual Fund’s cash holding fell to 9.34% as a percentage of total AUM in October from 13.74% in September. On the other hand, PPFAS Mutual Fund increased its cash holding to 19.86% in October from 18.06% in September.

Quant Mutual Fund had Rs 8,200 crore cash in its portfolio whereas PPFAS Mutual Fund had Rs 17,116 crore cash in its portfolio as on October 31, 2024. (Source: ACE MF)


Also Read | Quant Mutual Fund following risk-off strategy till mid-November

Quant Mutual Fund believes that the fall the market has witnessed this October is an endorsement of a larger risk-off thesis and the fund house will follow a risk-off strategy till mid - November, the fund house said in a mail to its unitholders.

The fund house has asked its investors to see this as an opportunity to build more resilient and rewarding portfolios given the foundation of strong fundamentals and improving corporate performance in the mid and small cap segment. Any further market corrections in the future will offer excellent buying opportunities and should be viewed from a long-term wealth building perspective.

PPFAS Mutual Fund holds more cash in its portfolio as holding some amount of cash gives an opportunity to deploy whenever a stock trades at attractive valuations and the investment opportunities do not come everyday across all companies and one has to wait to deploy money well.

“Holding some amount of cash gives us the opportunity to deploy whenever a stock trades at attractive valuations to deploy. Investment opportunities do not come everyday across all companies and one has to wait to deploy money well,” said Rajeev Thakkar, CIO of PPFAS Mutual Fund in a letter to the unitholders.

Also Read | PPFAS Mutual Fund CIO Rajeev Thakkar explains the problem with sectoral mutual funds

Quant Mutual Fund manages 21 equity schemes as on October 2024. Among these 21 equity schemes, Quant Small Cap Fund had the highest cash allocation in its portfolio of around Rs 2,884 crore, followed by Quant Active Fund which had Rs 836 crore cash in its portfolio.


Quant Large Cap Fund had Rs 217 crore cash in its portfolio. Around eight schemes of the fund house had less than Rs 100 crore cash in their respective portfolios. Quant Focused Fund had Rs 96 crore cash, followed by Quant Commodities Fund which had Rs 72 crore cash in its portfolio.

Quant ESG Equity Fund and Quant Consumption Fund had Rs 16.44 crore and Rs 15.22 crore cash respectively as on October 2024.

PPFAS Mutual Fund manages two equity oriented schemes. Parag Parikh Flexi Cap Fund, the largest flexi cap fund based on assets managed, had Rs 16,317 crore cash in its portfolio. Parag Parikh ELSS Tax Saver Fund had Rs 799 crore cash in its portfolio.


Fund managers are allowed to keep a portion of their portfolio in cash to meet events like redemptions or to make investments when they identify potential opportunities in the market.

The increase in cash holdings as a percentage of assets by mutual funds suggests that fund houses are adopting a cautious stance in the current market environment.