Mutual Fund Cash Holdings Fall 4.5% in August as Large Fund Houses Deploy More Capital

Indian mutual funds reduced the amount of cash sitting in their portfolios during August, even as the large-cap end of the equity market remained under pressure. Across 50 asset management companies, aggregate cash holdings fell to ₹1.82 lakh crore from ₹1.91 lakh crore in July, a decline of 4.5%, according to ACE MF data cited in the report. 

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In absolute terms, fund houses cut their combined cash position by around ₹8,516 crore during the month. The shift was fairly widespread when viewed over a longer period as well: among the 50 AMCs, 46 with comparable data were holding less cash than they did in August 2025. 

HDFC, SBI and ICICI Prudential Reduce Cash 

Some of the largest fund houses accounted for sizeable reductions during August. HDFC Mutual Fund’s cash holding came down from ₹23,174 crore in July to ₹21,413 crore. 

SBI Mutual Fund followed a similar course, reducing its cash position to ₹21,864 crore from ₹24,415 crore. ICICI Prudential Mutual Fund made an even larger cut, moving from ₹21,160 crore to ₹16,845 crore. 

Axis Mutual Fund ended August with ₹10,559 crore in cash, compared with ₹12,089 crore a month earlier. Nippon India Mutual Fund’s cash holding declined from ₹6,541 crore to ₹5,451 crore. 

Not every fund house moved in the same direction. Kotak Mutual Fund increased its cash holding from ₹5,243 crore to ₹7,424 crore, while Bandhan Mutual Fund raised its position from ₹5,930 crore to ₹8,580 crore. Motilal Oswal Mutual Fund also held more cash, with the figure rising from ₹3,401 crore to ₹4,238 crore. 

PPFAS and Quant Retain the Highest Cash Allocations 

Measured as a share of equity assets, PPFAS Mutual Fund continued to carry the highest cash allocation among the larger fund houses. Cash represented 15.5% of its equity assets in August, although that was down from 16.3% in July. 

Quant Mutual Fund was close behind at 15.4%, compared with 16.2% a month earlier. WhiteOak Capital Mutual Fund’s allocation eased to 11.3% from 11.6%. 

Elsewhere, some funds increased the proportion of their portfolios held in cash. Samco Mutual Fund moved to 10.2% from 8.1%, while Bank of India Mutual Fund increased its allocation to 9.6% from 8.8%. Bandhan Mutual Fund’s cash level rose to 8.1% from 6%, and Abakkus Mutual Fund stood at 8%. 

Several AMCs remained at the opposite end of the range. Navi Mutual Fund held just 0.5% of equity assets in cash, followed by Jio BlackRock Mutual Fund at 0.6% and Shriram Mutual Fund at 0.8%. Mirae Mutual Fund and UTI Mutual Fund were both at 1.1%. 

Cash Levels Have Also Fallen From Last Year 

For several large fund houses, the August numbers were noticeably below their levels from a year earlier. 

PPFAS Mutual Fund’s cash allocation stood at 22.3% of equity assets in August 2025, compared with 15.5% this August. HDFC Mutual Fund’s allocation declined to 4.2% from 6.3% over the same period. 

SBI Mutual Fund moved from 4.4% to 2.8%, while Nippon India Mutual Fund’s cash allocation fell from 2.1% to 1.1%. 

Equity Funds Continue to Receive Fresh Money 

The reduction in cash came during a month when equity mutual funds continued to attract investor money. Equity fund inflows increased to ₹29,329 crore in August from ₹24,697 crore in July. 

That happened despite a difficult month for large-cap equities. The BSE Sensex Total Return Index fell 1.3% in August, while the Nifty 50 Total Return Index declined 1.1%. Their calendar-year losses consequently stood at 8.9% and 7%, respectively. Large-cap stocks were down 1% during the month. 

Mid- and small-cap shares held up better. The NSE Midcap 150 Total Return Index gained 1.8% in August and was up 6.2% for 2026 so far. The NSE Smallcap 250 Total Return Index advanced 2.6% during August, taking its calendar-year gain to 10.6%. 

August therefore left mutual funds with a smaller aggregate cash pile than they carried into the month, while the individual numbers show that fund houses did not move uniformly. Several large AMCs cut cash substantially, even as others, including Kotak, Bandhan and Motilal Oswal, increased their holdings.