Mutual Funds Increase Cash Holdings by ₹5,913 Crore in December; Cash Levels Rise to 4.81% of AUM

In December, mutual funds significantly increased their cash allocations by ₹5,913 crore on a month-on-month basis, pushing their total cash holdings to ₹2.07 lakh crore, as per news reports. This marks a rise in the cash portion to 4.81% of their total assets under management (AUM), up from 4.68% in November. 

Surge in Cash Holdings Across Mutual Funds 

The cash holdings of mutual funds rose from ₹2.01 lakh crore in November to ₹2.07 lakh crore in December. This reflects a ₹5,913 crore increase in absolute terms.  

Data indicates that the percentage of cash relative to overall AUM climbed to 4.81% in December compared to 4.68% in the previous month. Meanwhile, total equity AUM increased marginally by ₹11,000 crore to ₹43.25 lakh crore. 

Top Fund Houses by Cash Allocation 

Among 49 asset management companies, 7 funds held over ₹10,000 crore in cash. HDFC Mutual Fund led with ₹31,503 crore, accounting for 6.79% of its total AUM.  

SBI Mutual Fund followed closely at ₹31,302 crore, while PPFAS Mutual Fund held ₹29,404 crore. ICICI Prudential Mutual Fund and Motilal Oswal Mutual Fund had ₹23,448 crore and ₹12,017 crore, respectively. Quant Mutual Fund and Axis Mutual Fund had ₹10,690 crore and ₹10,018 crore in cash. 

Read More: Mutual Funds Add 4.05 Crore Folios in 2025; Nippon India and HDFC Each Add Over 50 Lakh! 

Notable Cash Holdings by Smaller and Newer AMCs 

Abakkus Mutual Fund, a recent entrant, held ₹2,013 crore in cash, which represented 80.75% of its AUM. Other fund houses with relatively smaller cash positions included JM Mutual Fund with ₹195 crore, Old Bridge Mutual Fund with ₹158 crore, Quantum Mutual Fund with ₹113 crore, JioBlackRock with ₹41.84 crore, and Navi Mutual Fund with ₹31.97 crore. The Wealth Company Mutual Fund held ₹13.30 crore, making up 4.30% of its AUM. 

Cash Levels Reserved for Strategic Use 

Several fund houses stated that their cash levels reflect readiness for strategic allocation into equities based on company-specific merits rather than broader economic data. For instance, PPFAS highlighted a total of 24.04% allocated in cash, debt, money market instruments, and arbitrage positions, meant for future investment opportunities. 

Conclusion 

Increased cash levels in December show a cautious strategy among mutual funds, with a noticeable rise in cash-to-AUM ratios. The numbers also indicate readiness among fund houses to deploy this capital as opportunities emerge. 

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.