Mutual funds reduce cash allocation by over Rs 1,900 crore to Rs 2.05 lakh crore in January

Synopsis Mutual funds marginally reduced cash holdings in January while overall equity assets showed mixed movement. Cash as a proportion of assets inched higher, reflecting cautious positioning. A handful of large fund houses continued to hold significant liquidity, while many smaller AMCs remained largely invested, awaiting clearer market opportunities. Mutual funds have reduced their cash allocation by Rs 1,943 crore on a monthly basis to Rs 2.05 lakh crore in January 2026, compared to Rs 2.07 lakh crore in December 2025. On the flip side, the cash as a percentage of AUM increased to 4.87% in January from 4.81% in December. The total equity AUM went down by Rs 11,000 crore and was recorded at Rs 42.27 lakh crore in January 2026 against Rs 43.25 lakh crore in December. Also Read | HDFC Flexi Cap Fund crosses Rs 1 lakh crore AUM, third scheme to achieve milestone Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » As of January 2026, there are 49 asset management companies, of which six AMCs had over Rs 10,000 crore of cash in their respective portfolios. HDFC Mutual Fund has the highest cash allocation in its portfolio of Rs 31,510 crore, which was 6.87% of the total AUM. The AMC had an equity AUM of Rs 4.27 lakh crore as of January 2026. SBI Mutual Fund, the largest fund house based on assets managed, had Rs 29,690 crore cash in its portfolio. This was followed by the PPFAS Mutual Fund, which had around Rs 27,773 crore cash in its portfolio. Parag Parikh Flexi Cap Fund had Rs 27,023 crore cash, and Parag Parikh ELSS Tax Saver Fund had Rs 750 crore cash in its portfolio. Live Events “We have about 21.34% in cash holdings, debt & money market instruments and arbitrage positions which can be deployed in long-term investments at appropriate levels,” PPFAS Mutual Fund said in its monthly release. ICICI Prudential Mutual Fund had Rs 21,506 crore cash in its portfolio, which was followed by Axis Mutual Fund and Quant Mutual Fund. These AMCs had Rs 14,770 crore and Rs 13,125 crore cash respectively. Franklin Templeton Mutual Fund and Aditya Birla Sun Life Mutual Fund had Rs 3,998 crore and Rs 3,969 crore cash, respectively, in the first month of the current calendar year. Around 26 AMCs had less than Rs 1,000 crore cash in their respective portfolios. Abakkus Mutual Fund had Rs 382 crore cash in the portfolio during the said time period. Old Bridge Mutual Fund had nearly Rs 248 crore cash in the portfolio. JioBlackRock Mutual Fund had Rs 24.08 crore cash in its portfolio. Angel One Mutual Fund was the last one which had Rs 0.06 crore cash. The Wealth Company Mutual Fund fully deployed its cash in the market. Also Read | Arbitrage mutual funds see 2,507% jump in inflows in January. Can higher STT and tax changes dull the shine? SIF cash holding Two SIFs - Diviniti SIF (ITI Mutual Fund) and QSIF (Quant Mutual Fund) had Rs 121 crore and Rs 219 crore cash in their respective portfolios. Fund managers are allowed to keep a part of their portfolio in cash to meet events like redemptions or make investments when they see a possible opportunity in the market. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.) (Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online. ...moreless (Catch all the Mutual Fund News, Breaking News, Budget 2024 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online. ...moreless A tale of two events: How IndiGo-Air India power balance changed in 6 months Can the India-US trade deal alone arrest rupee’s downfall? Saurabh Mukherjea’s long walk through the quality cycle How the ‘barbaric relic’ turned boon for millions of SMEs in India Stock Radar: Jindal Steel stock breaks out from Saucer formation to hit fresh record high in February 2026 – time to buy? These mid-cap stocks with ‘Strong Buy’ & ‘Buy’ recos can rally over 25%, according to analysts 1 2 3