Equity mutual funds cash rich even as inflows decline, shows data

The equity market has been in a correction phase for several months. In February, it recorded its fifth consecutive monthly decline

Equity mutual fund (MF) schemes were flush with cash at the start of this month, even as fresh investments shrank in February.  As of February 28, equity schemes from the top 20 fund houses held 6.8 per cent of their portfolios in cash, up from 6.1 per cent in January and 5.9 per cent in December 2024, according to a report by Motilal Oswal Financial Services. This marks the highest aggregate cash holding since at least May 2021. 

Cash levels are often viewed as an indicator of fund managers’ market outlook. While MF executives emphasise their mandate to remain fully