Mutual Funds Trim Cash Holdings by 4.5% in August 2026

Mutual fund houses reduced their cash holdings in August, with the combined amount held by 50 AMCs falling 4.5% to ₹1.82 lakh crore from ₹1.91 lakh crore in July, according to a Moneycontrol news report citing ACE MF data. 

The reduction was around ₹8,516 crore. Cash holdings were also lower than a year earlier at 46 of the 50 AMCs for which comparable data was available. 

Large-Cap Stocks Decline 

The BSE Sensex Total Return Index fell 1.3% in August, while the Nifty 50 Total Return Index declined 1.1%. Their calendar year-to-date losses stood at 8.9% and 7%, respectively. Large-cap stocks fell 1% during the month. 

Indian equities faced pressure from higher crude oil prices, geopolitical tensions and hawkish comments from the US Federal Reserve Chair at Jackson Hole. Heavy fundraising activity and promoter selling also put pressure on market liquidity. 

Mid- and Small-Cap Stocks Gain 

The broader market performed better during August. The NSE Midcap 150 Total Return Index gained 1.8% and was up 6.2% in 2026 so far. 

The NSE Smallcap 250 Total Return Index rose 2.6% in August and gained 10.6% in the year to date. 

HDFC, SBI Cut Cash 

HDFC MF reduced its cash holding to ₹21,413 crore in August 2026, from ₹23,174 crore in July 2026. 

SBI MF's cash position fell to ₹21,864 crore from ₹24,415 crore. ICICI Prudential MF reduced its holding to ₹16,845 crore from ₹21,160 crore. 

Axis, Nippon India Also Reduce Holdings 

Axis MF cut its cash holding to ₹10,559 crore from ₹12,089 crore. Nippon India MF reduced its cash position to ₹5,451 crore from ₹6,541 crore. 

Some AMCs Increase Cash 

Kotak MF increased its cash holding to ₹7,424 crore from ₹5,243 crore. Bandhan MF raised its cash position to ₹8,580 crore from ₹5,930 crore, while Motilal Oswal MF increased it to ₹4,238 crore from ₹3,401 crore. 

PPFAS and Quant Hold Highest Cash Allocation 

PPFAS MF had 15.5% of its equity assets in cash in August 2026, down from 16.3% in July 2026. Quant MF's allocation stood at 15.4%, compared with 16.2% a month earlier. 

WhiteOak Capital MF held 11.3%, while Samco MF's allocation rose to 10.2% from 8.1%. 

Several AMCs Hold Less Than 2% 

Navi MF had 0.5% of its equity assets in cash, followed by Jio BlackRock MF at 0.6% and Shriram MF at 0.8%. Mirae MF and UTI MF each had 1.1% in cash. 

Equity Fund Inflows Rise 

Equity mutual funds received ₹29,329 crore in August 2026, compared with ₹24,697 crore in July 2026. The fall in cash holdings came alongside higher equity mutual fund inflows during August 2026. 

AMFI chief executive Venkat Chalasani said domestic economic indicators, an improvement in India's sovereign rating and the Monetary Policy Committee's neutral stance supported investor confidence. 

Read More: SIP Inflows Hit Record ₹32,297 Crore in August; Contributing Accounts Cross 10 Crore! 

Conclusion  

Cash holdings across mutual fund houses declined in August, while equity mutual funds saw higher inflows. Several major AMCs reported lower cash positions. 

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