Cash at equity mutual funds witness a rise: Report

livemint.com:

equity mutual funds have witnessed a rise in the past few months amid rising valuations. Total cash kept aside by equity mutual funds at the end of April rose to ₹1.34-lakh crore, 22 per cent higher than that at the end of December last year, reported Business Line quoting Fisdom Research data.

As a percentage of total equity assets, cash has gone 37 basis points up to 5.42 per cent during this period.Out of the 451 schemes, 24 had more than ₹1,000 crore in cash each. Fifty one schemes had cash in excess of 10 per cent and 131 schemes over 5 per cent, BL reported.Parag Parikh Flexi Cap Fund held the maximum cash amounting to ₹9,457 crore, 14.8 per cent of its assets.

HDFC Flexi Cap Fund, ICICI Pru Bluechip, SBI Contra, HDFC Mid-Cap Opportunities, and ICICI Pru Value Discovery held more than ₹5,000 crore in cash. Each of these mutual fund schemes have raised their cash component in the past four months.ALSO READ | Stay on course! Avoid changing lanes frequently in SIP, says WhiteOak Capital Mutual FundNifty 50 is trading at 20.6 times its FY25 estimated earnings per share.

The gauge has moved up 4 per cent in the four months to April. The market cap to GDP ratio was at 132 per cent at the end of April, much higher than the long term average of 85 per cent.The call to raise cash is against the fundamental doctrine of remaining invested all the time, but is employed to either protect the downside when the market declines or to avoid paying a high price for a stock.