Mutual Funds Increase Cash Holdings by ₹3,500 Crore in February; Corpus Swells to ₹2.09 Lakh Crore Amid Volatility

In February 2026, mutual funds increased their cash reserves by ₹3,500 crore, highlighting their strategy to navigate the ongoing market volatility. This action brings the total cash holdings to ₹2.09 lakh crore. 

Mutual Funds and Market Volatility 

Mutual funds have enhanced their cash allocations amidst volatility, with several large fund houses participating in this strategy.  

As of February 27, 2026, the cash allocation represented 4.89% of the total Assets Under Management (AUM), a slight rise from January's 4.87%.  

The total equity AUM recorded stood at ₹42.86 lakh crore, with several Asset Management Companies (AMCs) holding significant cash reserves. 

Cash Holdings of Major Fund Houses 

SBI Mutual Fund, the largest fund house by AUM, had ₹34,704 crore in cash, comprising 4.5% of its total AUM. PPFAS Mutual Fund followed with ₹29,740 crore in cash, equating to 21.19% of its total AUM across various funds.  

ICICI Prudential Mutual Fund and HDFC Mutual Funds also reported high cash allocations at ₹23,815 crore and ₹23,578 crore, respectively. 

Read More: Mutual Funds Pours Over ₹1,482 Crore in 6 IPOs in February, Led by Fractal Analytics! 

Other Notable Cash Allocations 

Axis Mutual Fund reported a cash reserve of ₹15,296 crore, which is 7.73% of its total AUM, while Quant Mutual Fund had ₹13,005 crore allocated in cash.  

Kotak Mutual Fund's cash holding was ₹5,652 crore as of February. Bandhan Mutual Fund held ₹5,086 crore in cash and Mirae Asset Mutual Fund had ₹1,939 crore. 

Trends in Mutual Fund Cash Reserves 

Edelweiss Mutual Fund had ₹1,183 crore in cash, amounting to 2.87% of its AUM. Abakkus Mutual Fund maintained ₹208 crore, whereas Helios Mutual Fund and Groww Mutual Funds held ₹166 crore and ₹146 crore respectively.  

Smaller fund houses such as The Wealth Company and JioBlackRock Mutual Fund reported cash reserves of ₹19.69 crore and ₹18.51 crore. 

Conclusion 

The increased cash holdings among mutual funds underscore a cautious yet strategic approach in response to market volatility. By boosting cash allocations, fund houses are positioning themselves to capitalise on future market opportunities while managing liquidity needs. 

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.