Mutual Funds' Cash Pile Falls In November As Investment Sentiment Slows

Cash held by actively managed mutual funds fell in November as the equity markets continued to decline, and the growth investments through systematic investment plans paused during the month.

The value of assets held in cash and cash equivalents by active equity schemes as of November-end stood at Rs 1.47 lakh crore, against Rs 1.49 lakh crore in the month prior, according to data provided by ACE MF and compiled by NDTV Profit.

In October, the cash pile had faced a marginal decline, on account of record investments made by mutual funds in equities, countering the record outflows recorded by foreign investors, though it continued to grow when excluding new fund offerings.

The contribution of investments via the SIP route also moderated slightly during the month of November, as the figure faced a marginal decline over the previous month, hitting a pause on the 16-month growth streak.

Overall investments made into actively managed equity mutual fund schemes also moderated over the past month to Rs 35,943 crore against Rs 41,886 crore.

Flows into new fund offerings also slowed to Rs 4,052 crore against Rs 6,078 crore last month.

Investments into sectoral/thematic schemes also faced moderation for the second month in a row. The category had picked up in popularity earlier during the year, with multiple new funds being launched almost every single month of the current fiscal so far, overtaking flexi cap schemes as the one with the largest corpus of assets under management.

Even on the level of the asset management companies, which take into account not only actively managed mutual fund schemes, but also passive ones, debt mutual funds, and hybrid schemes, cash levels recorded a decline of about 1.77%.