Modest Buying, Rising Cash Buffers – Equity MFs Turn Selective in October: Mutual Funds continued to be net buyers in equities during October, though the pace of deployment slowed sharply to ₹23,063 Cr — marking a six-month low in fresh equity investments. The cautious approach pushed overall cash holdings higher to ₹2.09 Lakh Cr, up from ₹1.99 Lakh Cr in September.
AMC Cash Ratio Dips as Equity AUM Expands: The average cash holding ratio across the top 20 Asset Management Companies edged lower to 4.54% in October, from 4.57% in September, primarily driven by a rise in equity AUM and a marginal dip from previous months. The ratio remained below the 5% mark, reflecting robust equity AUM growth and sustained investor confidence amid healthy market sentiment.
PPFAS Mutual Fund continues to hold the highest cash-to-AUM ratio among equity-oriented schemes at 22.17% (₹29,168 Cr), signaling a distinctly conservative investment posture and flexibility for future market opportunities. Quant MF follows with a substantial 11.77% (₹10,366 Cr), while ICICI & HDFC MF remains comfortably above the industry average above 6%, reflecting cautious optimism.
Parag Parikh & SBI Contra Lead in Cash Proportion: Parag Parikh Flexi Cap Fund holds the highest cash-to-AUM ratio of 22.56% (₹28,386 Cr), reflecting a distinctly conservative and flexible strategy aimed at capitalizing on future market opportunities. Close behind, SBI Contra Fund maintains 20.20% (₹9,940 Cr) in cash, signalling a cautious yet opportunistic stance amid current market uncertainties. HDFC Flexi Cap Fund, with 12.84% (₹11,692 Cr), also demonstrates a prudent approach, keeping ample liquidity for tactical deployment as valuations evolve.
Contra & Flexi Cap Funds Lead the Liquidity Charts: Contra Funds top the liquidity chart with the highest cash-to-AUM ratio of 15.19% (₹11,289 Cr), reflecting a highly defensive and opportunistic positioning amid ongoing market volatility. Flexi Cap Funds follow with 9.81% (₹52,413 Cr) held in cash, highlighting their tactical flexibility to deploy funds across market caps as opportunities arise.
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