Mutual Funds Deploy Cash Gradually Amid Sharp Market Gains in April: Mutual funds reduced the pace of equity buying in April, investing ₹30,594 crore during the market rebound, significantly lower than the record ₹98,746 crore buying in March. Meanwhile, cash holdings rose to ₹1.98 lakh crore from ₹1.86 lakh crore. However, the cash-to-AUM ratio edged lower, indicating that the sharp market rebound expanded equity AUM faster than cash accumulation, while deployment remained gradual.
AMC Cash Levels Ease, but Caution Persists: The average cash holding ratio across the top 20 AMCs eased to 5.03% in April from 5.16% in March, as equity-oriented AUM rose faster than absolute cash holdings, supported by gains in Indian equities. However, with cash levels still near 5%, fund managers appear to be maintaining a cautious stance while retaining liquidity to manage volatility and capture emerging opportunities.
PPFAS Mutual Fund holds the highest cash-to-AUM ratio at 18.71% with ₹27,559 Cr in cash, reflecting a distinctly defensive stance with strong flexibility for future deployment. Quant MF follows with a notable 14.38% cash holding or ₹12,076 Cr, while Axis MF also maintains an elevated cash buffer at 7.60% or ₹14,870 Cr, indicating a cautious yet opportunity-driven investment approach.
Flexi Cap Funds Lead in Absolute Cash Stash: Parag Parikh Flexi Cap Fund holds the highest cash buffer at ₹27,035 Cr, with cash forming 19.18% of AUM, signalling a defensive yet opportunity-ready stance. HDFC Flexi Cap Fund follows with ₹7,177 Cr in cash, or 7.14% of AUM, indicating liquidity available for tactical deployment as market conditions evolve.
Contra & Flexi Cap Funds Remain Cash Leaders: Contra Funds continue to top the liquidity spectrum with an 11.71% cash-to-AUM ratio and ₹8,418 Cr cash holding, reflecting a cautious yet opportunity-oriented stance. Flexi Cap Funds follow with 8.45% in cash or ₹47,314 Cr, underscoring their flexibility to dynamically allocate across market segments as opportunities evolve.
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