Equity mutual fund managers often keep cash reserves to handle market conditions and investor needs.
Fund managers hold cash in equity schemes for various reasons, including market overvaluation, difficulty finding quality stocks, and to meet daily redemption requests. Cash provides a buffer against downside risks in volatile periods.
Mutual fund managers have lowered cash levels in equity portfolios to the lowest point in five years. They used the opportunity created by recent declines in banking and IT stocks to buy shares.
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Retail investors put ₹38,440 crore into equity mutual funds last month, a modest decline from March levels. The dip occurred amid uncertainty over oil prices and lower SIP collections.
Foreign portfolio investors have reduced cash market selling in Indian stocks but continue to show caution through derivatives positions. The moves come amid a modest gain in the Nifty index.
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As of April 30, 2026, ten equity mutual funds had assets under management exceeding Rs 60,000 crore each. The top three funds each surpassed Rs 1 lakh crore.