Valuation Fears? Cash Holdings Of Top Mutual Funds Jump In November

When markets turn volatile, mutual fund houses hunt for pockets of value to make meaningful investments into. Given this, fund houses do take calls to keep dry powder or cash.

This can be because the fund managers choose not to invest this money due to various reasons like high valuations or a run up in stock prices. When the cash holding of an asset management company is on the higher end, this may indicate that the fund mangers have taken a cash call and are waiting on the sidelines to deploy this cash, as and when they find good opportunities.

For the month of November, ICICI Prudential Mutual Fund had the highest cash holding at Rs 58,021.17 crore, while Mirae MF sat at the bottom with Rs 7,654.13 crore in cash, according to data available with ACE MF as of Dec. 16.

ICICI Pru MF trimmed its cash holding by 10.82% or Rs 7,036.41 from October’s Rs 65,057.58 crore, but still managed to hold the highest cash position industry-wide. SBI MF followed closely with Rs 55,245.39 crore, but registered the steepest value reduction of Rs 8,167.32 crore or 12.88%.

HDFC MF, the third-largest by cash holding, actually eased 6.88% to Rs 45,277.35 crore. Rounding out the November top five in terms of cash holding were Nippon India MF with Rs 31,686.07 crore and Axis MF with Rs 29,232.81 crores.

Mirae MF saw the most significant bump up of its cash position industry wide in the month of November. The month-on-month build of Rs 3,524.64 crore, marked an 85.35% surge from the AMC's October cash holding of Rs 4,129.49 crore .

Tata MF on the other hand did some heavy deployment, bring its cash holding down to Rs 8,339.81 crore from Rs 11,663.29 crore in the previous month. While Motilal Oswal MF 's cash holding was at Rs 9,339.31 crore, UTI MF saw some heavy-deployment this month as well.

Overall, seven AMCs increased cash in November while eight reduced. Beyond these 15 players, Samco MF bumped up its cash holding the most going from Rs 312.74 crore in the previous month to Rs 603.21 crore in November.

Names like Angel One, Axis MF, Bajaj Finserv MF, Edelweiss MF, Motilal Oswal MF, Nippon India MF and PPFAS MF were among the names that saw little change in their cash holdings.