Money holdings of actively managed equity-oriented mutual fund schemes declined to a seven-month low of 5.5 per cent in June, signalling a shift from the cautious stance seen earlier within the yr.
Money ranges, which had been at 4.6 per cent in June 2024, had steadily risen to a peak of 6.8 per cent in April 2025 as fund managers stayed defensive amid market uncertainty. Over the previous two months, nevertheless, many fund homes have redeployed money into equities.
In worth phrases, complete money holdings throughout 517 lively fairness mutual fund schemes fell from ₹2.1-lakh crore in April to ₹1.86-lakh crore by June 2025.
ACEMF information exhibits 51 per cent of those schemes minimize money publicity between April and June, whereas 46 per cent raised it and the remainder held regular.
This shift got here towards the backdrop of a broader market restoration. From its peak in late September 2024 to early March 2025, Indian equities underwent a major correction — Nifty 100 declined by 17 per cent, whereas the Nifty Midcap 150 and Nifty Smallcap 250 dropped by 21 per cent and 26 per cent, respectively. The markets have since staged a sturdy comeback, with the Nifty 100, Nifty Midcap 150 and Nifty Smallcap 250 delivering returns of 14 per cent, 21 per cent, and 25 per cent, respectively, from their lows.
Renewed optimism post-April, pushed by cooling inflation, RBI price cuts, and hopes of revival in company earnings, inspired money deployment. Funds like Motilal Oswal Flexi Cap (money ranges minimize from ₹3,433 crore to ₹1,378 crore), Axis Massive Cap (₹4,074 crore to ₹2,072 crore), and Parag Parikh Flexi Cap (₹23,448 crore to ₹21,493 crore) made massive redeployments. Volatility additionally opened tactical alternatives in sectors like capital markets, electricals, transport, and defence.
Blended outcomes
Money serves as a cushion in falling markets and provides liquidity throughout corrections, however it’s a double-edged sword. In risky phases like the present one, cash-heavy portfolios typically miss out on sharp V-shaped market recoveries.
Between September 2024 and March 2025, largely funds with larger money — comparable to Parag Parikh Flexi Cap (20 per cent, common over final one yr), Parag Parikh ELSS Tax Saver (18 per cent) and HDFC Targeted (13 per cent) — helped restrict the draw back.
Nonetheless, within the restoration section from March to July 2025, largely low-cash funds outperformed. Motilal Oswal Massive & Midcap (2 per cent common money over final one yr), Invesco India Midcap (1 per cent), DSP Small Cap (6.5 per cent), and Sundaram Small Cap (6 per cent) led the pack.
Over the total interval (September 2024 to July 2025), some lively and low-cash methods fared higher — Motilal Oswal Multi Cap dynamically adjusted its money (between 3 and 21 per cent), whereas Invesco India Midcap and Invesco India Massive & Mid Cap stayed low on money and delivered robust returns.
Revealed on July 26, 2025
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