Mutual Funds Build Record Cash Pile of ₹2.15 Lakh Crore Amid Market Uncertainty

As of April 2025, equity mutual funds are holding an unprecedented ₹2.15 lakh crore in cash, the highest on record. This sharp buildup highlights growing caution among fund managers in response to heightened market volatility and an expected surge in equity supply.

Over the past 6 months, cash holdings have steadily climbed—from 5.7% of equity assets under management (AUM) in November 2024 to 7% by April 2025.

Who’s Holding the Most?

• SBI Mutual Fund leads in absolute terms, holding ₹36,000 crore in cash.
• ICICI Prudential follows with ₹28,000 crore, and HDFC Mutual Fund with ₹25,000 crore.

As a share of equity AUM:

• PPFAS Mutual Fund tops the list with 23.6% in cash.
• Motilal Oswal holds 17.5%, and Quant Mutual Fund 13%.

Other notable cash positions:

• SBI MF: 10%
• Axis MF: 8.6%
• ICICI Prudential: 8.2%
• HDFC MF: 7.5%

What’s Driving the Surge in Cash?

1. Market Volatility: Managers are maintaining liquidity to cushion against unpredictable swings.
2. Anticipated Equity Supply: A wave of new issuances is expected, including OFS deals, IPO lock-in expiries, and large public offerings.
3. Supportive Macroeconomic Signals: Falling crude prices, a stable rupee, possible RBI rate cuts, and renewed FII interest could set the stage for future deployment.

Also Read: Parag Parekh Flexi Cap Fund vs HDFC Flexi Cap Fund: Which Fund Delivered Higher Returns?
 

Conclusion

Mutual funds are sitting on enormous cash, which is strategically positioned to deploy capital when market conditions become favourable. The cash is ready—just waiting for the right opportunity.

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.