Mutual Funds Holding Over ₹10,000 Crore in Cash

Mutual funds, an essential vehicle for collective investment, allocate a portion of their portfolios to cash. This cash holding enables fund managers to cater to redemption requests, capitalise on potential investment opportunities, and maintain portfolio liquidity. In December 2024, mutual funds cumulatively held ₹1.87 lakh crore in cash, equivalent to 4.98% of their total assets under management (AUM), which stood at ₹36.29 lakh crore. Let’s explore the fund houses with significant cash allocations exceeding ₹10,000 crore during this period.

SBI Mutual Fund: Leading the Cash Holdings

SBI Mutual Fund, the largest fund house by AUM, reported the highest cash holdings of ₹31,767 crore in December 2024. This accounted for 4.61% of its total AUM of ₹6.57 lakh crore. 

HDFC Mutual Fund: Substantial Liquidity Reserve

HDFC Mutual Fund held ₹25,248 crore in cash, representing 6.74% of its total AUM. With an equity AUM of ₹3.49 lakh crore. 

ICICI Prudential Mutual Fund: Robust Cash Position

ICICI Prudential Mutual Fund maintained ₹23,477 crore in cash, which formed 5.86% of its total AUM. The equity AUM of ₹3.77 lakh crore. 

PPFAS Mutual Fund: Highest Percentage of Cash Allocation

Among all fund houses, PPFAS Mutual Fund held the largest percentage of its AUM in cash. The fund’s ₹18,247 crore cash holding accounted for 19.82% of its total AUM of ₹73,798 crore. 

Axis Mutual Fund: Maintaining Ample Liquidity

Axis Mutual Fund reported a cash holding of ₹15,052 crore, representing 7.69% of its total AUM. With an equity AUM of ₹1.80 lakh crore.

Why Do Mutual Funds Hold Cash?

Cash allocation in mutual fund portfolios serves multiple purposes, including:

1. Redemption Management: Ensuring sufficient liquidity to handle investor redemptions without disrupting the portfolio.
2. Market Opportunities: Providing flexibility to invest in lucrative opportunities as they arise, especially during market corrections.
3. Risk Mitigation: Acting as a buffer to reduce the impact of market volatility on the portfolio.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.