Cash levels at equity mutual funds continue to remain high

Equity schemes have seen inflows of more than Rs 10,000 cr each in April and May

Cash levels at equity mutual funds (MFs) continue to remain high, amid stocks hovering near their record highs. Against Rs 36,000 crore of the cash component in April, May witnessed a slight rise in absolute cash levels to Rs 36,300 crore. In percentage terms, however, cash levels (as a percentage of total equity assets) fell eight basis points (bps). 

Notably, equity schemes have seen inflows of more than Rs 10,000 crore each in April and May. Flushed with liquidity, fund managers are facing difficulties in deploying the cash, as stock prices remain elevated. This has resulted in a sustained pile-up