Cash Share Of Mutual Funds' Holdings Falls For First Time Since April

Mutual funds' allocation toward cash as a percentage of total assets held by actively managed equity schemes fell during September for the first time since April.

Allocation toward cash had been increasing for a major part of the current financial year, hitting a high of 4.92% of assets under management in August, according to data provided by Ace Mutual Fund.

However, in September, the total cash pile grew marginally by 0.9% to Rs 1.49 lakh crore, while the asset base grew 3.38% to cross Rs 31 lakh crore.

Excluding new fund offerings, the cash pile grew 0.5% and fell 0.14% as a share of the total asset base.

Mutual fund inflows into equity surpassed those made by domestic institutions as a whole during September. Funds bought stocks worth over Rs 32,200 crore, while DIIs' inflows stood at a little over Rs 30,900 crore, indicating net outflows by non-mutual fund domestic institutions.

So far in October, mutual funds have bought equities worth Rs 23,300 crore, while DIIs investment is worth nearly Rs 57,800 crore. This stands in stark contrast to the net outflows of over Rs 56,400 crore made by foreign portfolio investors.

Old Bridge's Focus Equity Fund increased their cash holdings from 4.8% in August to 10.4% as of Sept. 30, followed by Bandhan AMC which increased its cash pile to Rs 1,493 crore across active equity schemes.

Actively managed mutual fund schemes by Invesco saw their cash holdings fall Rs 568 crore to 1.6% of assets under management.

Among the top five asset management companies that saw their cash holdings decline during the month, Quant Mutual Fund saw the largest absolute decline at Rs 2,322 crore.