When markets turn volatile, mutual fund houses hunt for pockets of value to make meaningful investments into. Given this, fund houses do take calls to keep dry powder or cash.
This can be because the fund managers choose not to invest this money due to various reasons like high valuations or a run up in stock prices. When the cash holding of an asset management company is on the higher end, this may indicate that the fund mangers have taken a cash call and are waiting on the sidelines to deploy this cash, as and when they find good opportunities.
For the month of November, ICICI Prudential Mutual Fund had the highest cash holding at Rs 58,021.17 crore, while Mirae MF sat at the bottom with Rs 7,654.13 crore in cash, according to data available with ACE MF as of Dec. 16.
ICICI Pru MF trimmed its cash holding by 10.82% or Rs 7,036.41 from October’s Rs 65,057.58 crore, but still managed to hold the highest cash position industry-wide. SBI MF followed closely with Rs 55,245.39 crore, but registered the steepest value reduction of Rs 8,167.32 crore or 12.88%.
