Equity Buying Slows to Five-Month Low; Cash Holdings Rise: Mutual funds invested ₹16,256 crore in equities during July 2026, marking the lowest monthly buying since February 2026, when purchases stood at ₹11,422 crore. Overall equity-oriented mutual fund cash holdings increased to ₹1.92 lakh crore in July from the calendar-year low of ₹1.84 lakh crore in June, indicating relatively cautious deployment as net equity purchases remained below net inflows into equity-oriented schemes.
AMC Cash Levels Rise Marginally in July: The average cash holding ratio across the top 20 AMCs increased to 4.66% in July from 4.53% in June, marking a 13 bps rise. The increase suggests a modest build-up in liquidity, indicating a slightly more cautious stance among fund houses while retaining sufficient cash to manage market volatility and capitalize on emerging investment opportunities.
PPFAS Mutual Fund holds the highest cash-to-AUM ratio at 16.32%, with ₹25,291 Cr in cash, closely followed by Quant MF at 16.16% with ₹14,740 Cr. The elevated liquidity levels indicate a relatively cautious stance and provide greater flexibility to deploy capital as opportunities emerge.
Parag Parikh Flexi Cap Fund Leads in Absolute Cash Holdings: Parag Parikh Flexi Cap Fund holds the largest cash reserve at ₹24,794 Cr (16.70% of AUM), followed by HDFC Mid Cap Fund at ₹7,290 Cr (6.93%) and HDFC Flexi Cap Fund at ₹6,433 Cr (5.81%).
Contra & Flexi Cap Funds Lead Cash Holdings: Contra Funds remain the most cash-heavy category at 9.18% of AUM (₹6,809 Cr), reflecting a cautious yet opportunity-driven approach, while Flexi Cap Funds hold the largest absolute cash pile of ₹44,934 Cr (7.47% of AUM), providing fund managers with significant flexibility for tactical deployment across market segments.
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