Equity Mutual Funds Play Safe with ₹2.3 Lakh Cr Cash Buffer: India’s equity mutual funds continue to adopt a cautious stance, with cash reserves hovering above ₹2.3 Lakh Cr as of April 2025 — sustaining one of the highest liquidity cushions in recent years. Despite intermittent market rallies, AMCs are holding back on aggressive equity allocations, signalling a preference for dry powder amid global and domestic headwinds.
Average Cash Holding Edges Higher Again: The average of cash holding ratio among the top 20 AMCs ticked up further to 6.53% in April, compared to 6.03% in March, extending the cautious momentum.
PPFAS MF leads with the highest cash holding ratio of 23.57%, driven by its cautious flexi-cap strategy. Motilal Oswal MF and Quant MF follow with 14.50% and 13.05%, also maintain sizable liquidity buffers. Large players like SBI MF, HDFC MF and ICICI Pru MF lead in absolute cash holdings — SBI MF alone holds over ₹38,000 Cr in cash.
Motilal Oswal Flexi Cap Fund leads with the highest cash holding ratio at 33.34%, followed closely by Motilal Oswal Midcap Fund and Parag Parikh Flexi Cap Fund have cash holding ratios at 24.54% and 23.79% respectively, among the highest in active equity schemes. SBI Contra Fund and SBI Small Cap Fund maintain over 20% in cash.
Contra Funds lead with the highest cash holding at 17% of AUM, signaling a highly cautious stance, followed by Flexi Cap (10.89%) and Focused Funds (9.39%), reflecting flexible allocation strategies. Small Cap Funds also maintain a notable 8.80% cash buffer to guard against volatility-driven corrections.
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