Equity Mutual Funds Turn Buoyant in May Amid High Cash Reserves: India’s equity mutual funds adopted a more optimistic stance in May 2025, ramping up market purchases despite a decline in net inflows. However, overall cash holdings remained elevated at ₹2.17 Lakh Crore—only slightly lower than ₹2.3 Lakh Crore in April—indicating continued caution and selective deployment.
Top AMCs Cash Holding Ratio Falls to 5.75%: The average cash holding ratio among the top 20 AMCs declined to 5.75% in May, down from 6.53% in April, reflecting a measured increase in equity allocations.
PPFAS MF leads the pack with the highest cash holding ratio at 21.62%, reflecting its conservative and flexible investment approach. SBI MF holds the largest pile at ₹34,747 Cr, followed by HDFC MF ₹27,133 Cr and ICICI Pru MF ₹26,752 Cr, showing significant dry powder among large AMCs. Motilal Oswal MF and Quant MF follow with 13.56% and 10.35% of AUM in cash, respectively, highlighting strong liquidity positioning.
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 top the chart with 16.08% of AUM in cash, indicating a highly cautious or opportunistic approach amid market uncertainty, Flexi Cap Funds follow with a substantial 10.26%, indicating a deliberate strategy focused on liquidity and tactical allocation flexibility. Focused Funds, with 8.76% in cash, appear to support their concentrated stock-picking approach with a healthy liquidity buffer. Small and Mid Cap Funds also show prudence, holding 7.98% and 7.15% respectively, likely to weather short-term volatility or await better entry points.
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