Record Buying – Equity MFs Deploy Cash Aggressively: Equity mutual funds pared down their cash reserves to ₹1.98 Lakh Cr in August 2025 from ₹2.07 Lakh Cr in July, marking a clear shift towards active deployment. The cutback coincided with the calendar year’s highest monthly equity purchases of ₹64,889 Cr, underscoring fund managers’ conviction to seize opportunities created by sharp FPI selling. The move highlights a strategy of utilizing existing liquidity to strengthen market positioning.
AMC Cash Ratio Dips After July Uptick: The average cash holding ratio among the top 20 AMCs slipped to 4.82% in August, after rising to 5.94% in July and continues to stay well below the 5% mark.
PPFAS MF continues to maintain the highest cash-to-AUM ratio at 22.33% (₹26,926 Cr), highlighting its highly cautious stance. Quant MF follows with a sizable 10.72% (₹9,035 Cr), while HDFC MF holds 6.30% (₹26,494 Cr), staying well above the industry average in liquidity.
Parag Parikh & SBI Contra Lead in Cash Proportion: Parag Parikh Flexi Cap Fund continues to top the list with 22.71% of AUM in cash (₹26,129 Cr), followed closely by SBI Contra Fund at 21.57% (₹10,064 Cr), underscoring a strong liquidity stance. HDFC Flexi Cap Fund holds 11.38% (₹9,327 Cr), signalling ample readiness to deploy funds when valuations turn attractive.
Contra & Flexi Cap Funds Lead the Cash Pile: Contra Funds continue to hold the largest liquidity cushion with 16.38% of AUM in cash (₹11,486 Cr), reflecting a highly defensive stance. Flexi Cap Funds follow with 9.70% (₹48,106 Cr), indicating fund managers’ preference to keep ample dry powder to deploy during market volatility.
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