Active Mutual Funds Hold Over ₹2 Lakh Crore Cash in October Despite Market Rally

In October 2025, Indian equity mutual funds maintained higher-than-usual cash buffers, even as stock markets surged and foreign capital flowed in, displaying fund managers’ cautious stance amidst stretched valuations and optimism in earnings.

As per ACE equities, Indian equity mutual funds held ₹2,09,000 crore in cash during October 2025, marking a rise from ₹1,99,000 crore in September. The cash-to-AUM ratio increased slightly to 4.11% from 4.10%. 

ICICI Prudential, SBI and Parag Parekh Lead in Absolute Cash Reserves

Among the top fund houses, ICICI Prudential Mutual Fund recorded the highest cash reserve at ₹32,800 crore, representing 6.5% of its AUM. SBI Mutual Fund and Parag Parekh Mutual Fund held ₹31,900 crore and ₹29,160 crore, accounting for 4.2% and a significant 22.2% of their AUMs, respectively. HDFC Mutual Fund followed closely with ₹28,740 crore in reserves.

AUM-Wise Percentage Shifts Across Fund Houses

Motilal Oswal Mutual Fund raised its cash holding from 5.4% to 7.2%, while 360 One Mutual Fund increased its ratio from 2.8% to 4.5%. Quant Mutual Fund’s allocation rose to 11.8% from 10.9%, and Invesco's cash rate climbed to 3.9% from 3.2%.

Read More: JioBlackRock Flexi Cap Fund Reveals Maiden Portfolio; AUM at ₹1,808 Crore Post NFO!

Notable Declines in Cash Levels by Select Fund Houses

On the other hand, Samco Mutual Fund sharply reduced its cash holdings to 11.9% from 25%. NJ Mutual Fund cut down from 5.5% to just 0.5%, and Old Bridge Mutual Fund reduced from 10.6% to 7.5%. Fund houses like Baroda BNP Paribas, WhiteOak Capital, Trust, Quantum and Groww Mutual Funds also pulled back on reserves.

Conclusion

Despite a bullish market and foreign inflows, mutual funds opted to retain high cash levels. Their approach reflects concern over market valuations and a preference for calculated asset allocation. Variations across fund houses underline a mix of conservative and risk-aligned strategies adapted to market dynamics.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or 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 are subject to market risks, read all scheme-related documents carefully.